I beg to move,
That this House has considered e-petition 740671 relating to personal allowance for state pensioners.
It is a pleasure to see you in the Chair, Dr Huq. I pay tribute to the petitioner, Tim Mason, and the 120,000 people who have signed the petition, including hundreds in my constituency in the Scottish Borders. I come to this debate with a simple starting principle: those who have worked hard throughout their life should have dignity and security in retirement.
Tim got in touch with me prior to the debate to explain why he created the petition. His story is worth sharing: he receives a pension from the Royal Mail of about £400 per month, but once he receives his state pension, that Royal Mail pension is reduced to about £290 per month. His motivation for starting the petition was that many other pensioners will undoubtedly find themselves in the same position, paying tax on relatively small pensions for which they have worked hard and saved throughout their life.
There are growing concerns that increasing numbers of pensioners are finding themselves liable to pay tax on their pensions. That is because the triple lock has increased the state pension year on year, while personal tax allowances have remained frozen. As a result, some pensioners are required to complete a self-assessment tax return, while others receive unexpected tax bills from HM Revenue and Customs. Many pensioners do not have substantial incomes and have limited savings; it can therefore be both distressing and deeply worrying for those hard-pressed pensioners to deal with tax demands. As the organisation Silver Voices has highlighted, taxing the state pension risks undermining the very principle of a retirement safety net, which was designed to ensure that people can afford life’s basic necessities in retirement.
Pensioners face many other challenges too, such as higher heating and fuel bills. We cannot forget that it was this Labour Government who so cruelly stripped away the winter fuel allowance two years ago as one of their first acts in government. In Scotland, the SNP Government did the same. Although the partial U-turn last year was welcome, many pensioners spent a winter cold in their homes, and some pensioners still do not receive the support on which they had previously relied.
When the Conservatives came into office in 2010, the previous Labour Government had already subjected pensioners to a pension tax raid worth more than £100 billion, and had delivered a paltry 75p-per-week increase in the state pension. Improving the lives of pensioners had to be a priority, and that is why the triple lock was introduced. It was the right thing to do and, as the Leader of the Opposition has made clear, the Conservative party stands by it. The introduction of the triple lock saw the basic state pension increase by £3,700 between 2010 and 2024. At the last general election, my Conservative colleagues and I stood on a manifesto commitment to introduce a “triple lock plus”, guaranteeing that the state pension and the tax-free personal allowance for pensioners would always rise by inflation, earnings growth or 2.5%, whichever was the highest.
A view has evolved among some people, particularly online, that pensioners are all wealthy and that they enjoy multiple holidays, drive expensive cars and own second homes that they rent out to younger generations. That may be true of a very small minority, but it is simply not the reality for the vast majority of pensioners, especially in my constituency in the Scottish Borders.
We should celebrate the fact that one of the landmark achievements of successive Governments over the past 30 years has been the reduction in pensioner poverty. There was a time not so long ago when 28% of pensioners lived in poverty. By 2024, that figure had fallen to just 12% for pensioner couples and 16% for pensioners overall. Poverty among pensioners is now lower than in any other age group in the United Kingdom. Many pensioners still struggle, however, and pensioner poverty is often the result of disadvantages that accumulate over a lifetime, long before retirement.
We can and must do much more to improve the lives of pensioners. These are changes that would benefit many other people in our country. Take stamp duty land tax, or land and buildings transaction tax in Scotland: many pensioners would like to downsize and move into a home that is better suited to their needs, particularly once their children have left home, but those taxes, which can amount to thousands of pounds, are one of the biggest barriers preventing them from moving on. We should therefore scrap stamp duty and LBTT entirely. Doing so would benefit the whole country, help pensioners to move into more suitable homes if they so wish and potentially free up capital and free up family homes for younger people seeking to get on the housing ladder.
Heating is one of the highest costs that pensioners face, and older people are often more exposed to rising energy costs. This Labour Government came to office promising to cut energy bills by £300, but household energy bills have risen by £294. We need to bring energy bills down, and we can do so by scrapping renewable energy subsidies, abolishing the carbon tax and cutting VAT on household energy bills. These measures would make a real difference to pensioners, helping them to keep more of the money they have worked hard for and saved throughout their life. They would deliver real, tangible benefits that would improve the lives of pensioners right now.
We should not and cannot forget the hard work and often the sacrifices that pensioners have made. They have worked hard and contributed to our society. I hope that the Minister will listen carefully to the concerns raised by the petitioner Tim Mason, as well as the thousands of people who have signed the petition.
The purpose of this debate is not simply to consider one particular proposal, but to consider the broader concern expressed by many pensioners about the interaction between the rising state pension, the frozen tax thresholds and the financial pressures that many older people continue to face. The triple lock has undoubtedly made a significant difference to pensioners’ incomes. It remains one of the most important reforms introduced by the previous Conservative Government: it has helped to improve financial security in retirement and has played an important role in reducing pensioner poverty.
Whether a separate personal allowance for pensioners is the right solution is a matter on which hon. Members may hold different views, but the petition demonstrates that these concerns are real and are shared by many people across the country. Pensioners have worked hard, paid their taxes, raised families, built communities and, in many cases, served or fought for our country. They deserve dignity, security and peace of mind in retirement. I look forward to the Minister’s response to the important issues raised by Tim Mason, and the many thousands of people who have supported his petition.