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BBC Expert Update Key State Pension £13,036 Rule Change on Weds
Treasury plans a new tax-free allowance so the 1 million pensioners on the full state pension avoid income tax as payments rise to £13,036.
- Chancellor John Healey is expected to confirm plans in Wednesday's Budget to shield pensioners relying solely on the state pension from income tax as annual payments rise in April.
- Rising 3.9% to £13,036 next April under the triple lock, the state pension would exceed the frozen £12,570 personal tax allowance, triggering tax liabilities for those relying solely on the pension.
- Analysts warn the policy creates a "cliff edge" for those with modest private income, while Aegon's Kate Smith notes concerns about perceived unfairness among private savers who built retirement savings.
- Alongside pension measures, the Treasury is expected to address welfare spending, with ministers considering potential reforms to Personal Independence Payment eligibility for younger claimants.
- This tax-free allowance is expected to rise in line with headline state pension payments for the rest of this parliament, shielding these individuals from income tax until at least 2029.
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Healey's state pension shield could create 'messy £200m cliff edge'
The Treasury’s plans to shield low-income pensioners from income tax could lead to a “messy” cliff edge and a ballooning bill for future governments, a former pensions minister has warned. Chancellor John Healey will use his maiden Autumn Budget this week to protect nearly one million retirees who are dependent on the state guarantee by [...]
·London, United Kingdom
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The IndependentReposted by 
The Independent (US)
The Independent (US)What the Budget will mean for pensioners and income tax
Several major policy announcements are expected at the event
·London, United Kingdom
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Coverage Details
Total News Sources21
Leaning Left4Leaning Right4Center5Last UpdatedBias Distribution38% Center
Bias Distribution
- 38% of the sources are Center
38% Center
L 31%
C 38%
R 31%
Factuality
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