Calls made to increase pensioner threshold amid £500 tax fears

manchestereveningnews.co.uk:

Chancellor Rachel Reeves has announced that millions of pensioners will see their weekly State Pension payments rise by 4.1% next year, thanks to the earnings growth measure of the Triple Lock policy.

She also revealed that the Personal Allowance will remain frozen at £12,570 until 2028. Currently, around 64% of older people, or 8.1 million individuals, pay tax in retirement, largely due to additional income from workplace or private pensions on top of their State Pension.

Despite the freeze ending in 2028, someone on the full New State Pension over the 2025/26 financial year will receive £11,975.60, leaving just £595 - roughly £50 per month - before the £12,570 personal tax allowance threshold is exceeded.

Following the Budget announcement, Lee Anderson (Reform UK) asked the Chancellor in a written question if she would consider introducing a higher tax threshold specifically for people over State Pension age.