Tories announce plans for pensions tax cuts

The Conservative party has unveiled plans to introduce 1.7 billion worth of tax cuts to reward people who invest in pension plans.

11:02 17 April 2005

The Conservative party has unveiled plans to introduce 1.7 billion worth of tax cuts to reward people who invest in pension plans.

Leader Michael Howard said he wanted to demonstrate to voters that "it pays to save" and announced that the party would use almost half of proposed 4 billion tax cuts to tackle the pensions crisis.

"The crisis in our pensions system is a long term problem but we must start to tackle it now," Mr Howard said.

The Conservatives have already promised 1.3 billion to help pensioners with council tax.

Mr Howard accused Labour of being solely interested in winning votes, claiming: "Mr Blair takes hard working families for granted and he refuses to take decisions for the long term."

In an interview in the Sunday Times, Mr Howard said: "I'm very clear that tackling the pensions crisis will be a key part of my job as prime minister.

"That means sending out a clear message that it pays to save, and that a Conservative government would be on the side of people who do the right thing by putting money aside for their retirement."

The Conservative leader said the pensions policy was aimed at the ten million working people who are not saving at all for their pension.

Tory pensions spokesman Phil Willetts claimed that Labour had pledged "virtually nothing" on pensions.

The latest proposed tax cut leaves the Tories with a further 1 million to announce before the general election on May 5th.

The party has ruled out a rise in income tax or national insurance thresholds, but could turn to inheritance tax, stamp duty, capital gains, small business or environmental taxes for further cuts.

The Liberal Democrats claim that the Tories' tax plans are unachievable and the government has dismissed them as unaffordable.