Older Britons will be plunged into poverty if the tax threshold remains frozen, a campaigner for pensioners’ rights has warned.
Dennis Reed told FTAdviser: “Many more pensioners across the country would be plunged into poverty as a result of political choice.” Reed is a longtime campaigner and has launched a Change.org petition demanding the Labour government increase the tax threshold for state pensioners by at least £1,000 in the upcoming Spring Statement.
The petition also demands the Government commits to increasing the tax threshold in line with the triple lock increases in future years.
Reed said he was concerned “the frozen tax personal allowances, the top of the new state pension may breach the current personal allowance of £12,570 in 2026.
He said: “This would lead to the ludicrous situation of the state pension safety net, which has already been paid for through national insurance and tax, being taxed again.”
In 2024 Reed lobbied the government to retain the triple lock for pensions in its final Budget.
His organisation, Silver Voices, campaigns on all senior citizen issues, including the controversy over removing the winter fuel allowance.
Reed added that failure to increase the tax threshold would be a “double whammy” on older people already suffering from rising fuel bills.
The number of pensioners paying income tax is on the rise, driven by higher state pensions and frozen tax thresholds. Figures from HMRC have reveal that 7.13 million people of pension age paid tax in the 2022/23 tax year, marking a 5.7% increase from the previous year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Pensioners were paying a significant chunk of tax.” However, she warned: “Frozen tax thresholds, coupled with increased state pensions, may pull more pensioners who are solely reliant on state pension into taxpaying territory.”
Source link
