Member of Parliament for Chelsea & Fulham and Chief Secretary to the Treasury, Greg Hands, 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.
From 6 April 2016, eligible people in Chelsea & Fulham 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 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, but from now on, everyone will build up the new State Pension in the same way. More than 75 per cent of women and more than 70 per cent of men will gain in the first 15 years of the new State Pension, and by 2030 more than three million women stand to gain an average of more than £550 extra per year as a result of these changes.
The new pension is among a number of reforms to taxes, National Insurance allowances, and savings coming into effect on 6 April to back hard work, support savers, and ensure economic security at every stage of life. This includes a new personal savings allowance which means that most people will be able to earn up to £1,000 interest a year on their savings without paying tax. More than 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 Chelsea & Fulham, 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. An estimated 875 low-earners in Chelsea & Fulham will be taken out of paying income tax altogether today, while 47,685 people in Chelsea & Fulham will see their income tax cut.
Commenting on these reforms, Greg Hands said: "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 Chelsea & Fulham 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 47,685 people in Chelsea & Fulham will receive an income tax cut today, and that 875 low-earners will be taken out of income tax altogether, as we continue to back people who are working hard, saving hard, and doing the right thing."