Speaking earlier this week, Portillo said the Conservatives would take a 400,000 pensioners aged 75 and over out of tax, by increasing the age-related personal allowance by Pounds 2000, at a total cost of Pounds 350m.
‘Pensioners who are over 75 and who have incomes between Pounds 9,570 and Pounds 17,000 will gain Pounds 440 a year from the plans,’ the shadow chancellor said.
In addition he promised to help out an additional 600,000 pensioners, 65 and older, by increasing their personal allowance by Pounds 2000, at a cost of Pounds 600m.
He added that nobody would lose out from this proposal, but said pensioners who earned in excess of Pounds 24,330 would not make any gains from the cuts. Pensioners earning as high as Pounds 24,000 per annum would make a saving of Pounds 440 a year.
In another measure aimed at helping pensioners, Portillo said a Conservative government would reform the rules governing the purchase of pension annuities.
Pensioners, who previously had to invest all their pension fund money if they wished to purchase an annuity, would be given the freedom to choose how to invest their pensions.
Portillo said the tax savings for pensioners and other proposals to aid taxpayers would cost a total of Pounds 8bn, but added the Tories had set aside money for this. He criticised his adversary Gordon Brown for not introducing sufficient tax cuts in last week’s Budget.
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