Healey is set to shield one million pensioners from income tax, but savers with £1 of private pension face exclusion
John Healey, who resigned as Chancellor in June demanding Britain reach 3% of GDP on defence by 2030, now says the timetable will wait for next year's spending review.
Former pensions minister Steve Webb has cautioned that the plan is 'messy' and will carry a price tag of £200m a year by 2030. Concerns have been raised that pensioners on the old pre-2016 state pension may be left out, producing a 'two tier' system. The full state pension is forecast to increase by £489 to £13,036, pushing it above the frozen £12,570 threshold. Chancellor John Healey is scheduled to outline the details in Wednesday's Budget.
Standard Life says those living on the state pension alone could save £770 by 2031.
Healey is also expected to keep the £268,275 tax-free lump sum cap.
Webb says the widening gap will make the policy 'hard to switch off'.
