The Government has faced criticism over the so-called stealth tax
More pensioners face having to pay income tax.
Older Brits with only small private pensions could soon find themselves paying income tax under ‘unfair’ rules.
The full state pension rate is set to overtake the personal allowance, the point at which someone starts paying tax, in 2027, and it will come within just a few pounds of it from next April.
It leaves millions of pensioners facing an HMRC tax raid.
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Older Brits whose sole income is the state pension will soon find themselves having to pay, unless the Government decides to change the rules.
It also means those with small private pensions or other income streams face being taxed.
Tax bands have stayed frozen since 2021, and over that time the state pension has increased each year in line with the triple lock policy, getting ever closer to the £12,570 threshold.
The full state pension will climb to just £22 below this limit from April.
The frozen bands mean more people are dragged into higher tax rates each year.
Critics claim this is a ‘stealth tax’ as more people are forced to pay each year without any official announcement of tax rises.
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Ministers are likely to come under further pressure to raise tax bands, though this would be a hugely costly move.
A spokesperson for finance experts Spencer Churchill Claims Advice said: “If the triple lock remains in place, it is highly likely that by April 2027 the full state pension will actually surpass the personal allowance threshold.
“That would mean some pensioners paying income tax purely on their state pension, something the Government will find politically difficult to justify.
“The Government faces a difficult balancing act.
“Removing the freeze on the personal allowance would cost billions at a time when fiscal headroom is already limited, yet scaling back the triple lock risks alienating older voters before the next election.”
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