Rachel Reeves offers large tax blow to state pensioners – ‘3 years of pain’ | UK | News | EUROtoday

State pensioners are being “pushing more pensioners into paying tax” due to Chancellor Rache Reeves.

In her autumn Budget, the Chancellor prolonged the freeze on tax thresholds for an additional three years, that means it is going to now be in place till 2031.

The triple lock has ensured that the state pension will rise, however with the earnings tax private allowance caught at £12,570, state pensioners may quickly get taxed on their funds.

Caroline Abrahams, the charity director at Age UK, mentioned the Government’s freezing of tax thresholds will “drag more older people into paying income tax, including some on low and modest incomes who need all the help they can get to sustain a decent standard of living at a time when prices for essentials are constantly rising”.

She added that the transfer is “deeply regrettable” as a result of it is going to final for a full three years.

After the Budget, Ms Reeves settled some nerves when she confirmed that anybody relying solely on state pension earnings won’t be taxed.

In an interview on ITV’s The Martin Lewis Money Show Live, she mentioned Reeves a “simple workaround” will probably be applied to cease state pensioners paying small quantities of tax.

She added: “If you just have a state pension, and you don’t have any other pension, we are not going to make you fill in a tax return.”

Former pensions minister Steve Webb mentioned: “The Government has a clear presentation problem when the new state pension goes above the tax threshold in 2027. But millions of pensioners already get state pensions above the tax threshold and nothing has so far been done for them. So there is a real risk that pensioners on the new system will be more favourably treated.”