Nearly one million State Pensioners could pay tax this year due to the £12,570 Personal Allowance freeze.
A Conservative MP has urged the Department for Work and Pensions to “encourage the Chancellor to look again at the Personal Allowance and allow more pensioners to keep more of their well-deserved money”. During DWP questions in Parliament on Monday, Alexander Stafford highlighted how older people “should be able to retire in comfort and dignity” and are benefiting from the State Pension Triple lock increase of 8.5 per cent over the 2024/25 financial year and 10.1 per cent last year.
Due to the annual State Pension uprating, more people in retirement with additional income are expected to be tipped over the tax threshold. Financial experts from Spencer Churchill estimate that up to 900,000 retirees may be facing an unexpected tax bill at the end of the current financial year. Similarly, someone on the full rate of the Basic State Pension will receive £169.50 each week, £678 each four-week pay period. Over the 2024/25 financial year, this is an increase of £692, taking the annual income from £8,122 to £8,814.
On the number of affected retirees The spokesperson said: “This year, up to 900,000 retirees, particularly those benefiting from the Marriage Allowance, might find themselves paying taxes on their State Pensions for the first time. This is a direct consequence of the substantial rise in State Pensions and the freezing of tax thresholds. It's a significant change that requires careful financial review and planning.
Latest State Pension News Earlier this year, the UK Government rejected an online petition calling for income tax on the State Pension to be scrapped in order to help “reduce the tax burden on pensioners”.
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