Richard Harrington MP for Watford has welcomed the biggest reform of the state pension since it was created more than a century ago, alongside a major package of reforms to tax, pensions and savings to help workers which is coming into effect today.
The new State Pension particularly benefits women reaching pension age over the next decade. In the past, many were unable to build much of the previous earnings-related additional State Pension – from now on, everyone will build up the new State Pension in the same way. Over 75 per cent of women and over 70 per cent of men will gain in the first 15 years of the new State Pension, and by 2030 over three million women stand to gain an average of over £550 extra per year as a result of these changes.
From Wednesday 6 April 2016 – eligible people in Watford who reach retirement age will receive the new State Pension, with the full rate set at £155.65 per week, or over £8,000 a year.
The new pension is among a number of reforms to taxes, National Insurance allowances and savings coming into effect today to back hard work, support savers and ensure economic security at every stage of life. This includes a new personal savings allowance that means most people will be able to earn up to £1,000 interest a year on their savings without paying tax. Over 18 million are set to benefit, with nearly 17 million taken out of savings tax altogether.
The tax free personal allowance also increases from £10,600 to £11,000, giving an £80 tax cut to a typical taxpayer in Watford, while the higher rate threshold rises to £43,000, delivering on the Conservatives commitment that working people will keep more of the money they earn.
‘We are committed to supporting people at every stage of their life, which means helping hardworking people keep more of the money they earn and providing dignity and security in retirement.
‘The new State Pension will provide clarity and confidence for people across Watford and Abbots Langley about what income they will get from the state in their retirement while helping those who have historically lost out under the old system.
‘It’s great news that 50,000 people in Watford will receive an income tax cut today and 1,174 low-earners will be taken out of income tax altogether.