Amid the Triple Lock hike, it has become a concern that some state pensioners will face tax bills to HMRC.
DWP breaks silence on the state pensioners who’ll never pay any tax to HMRC
The Department for Work and Pensions has broken its silence on the state pensioners who WON’T pay any tax to HMRC. Amid the Triple Lock hike, it has become a concern that some DWP state pensioners will face tax bills to HMRC.
In the Commons this week, ahead of the Labour Party government Autumn Budget, which is due to cement the uplift, Liberal Democrats MP Freddie van Mierlo asked how the government was planning to shield pensioners.
Responding to Mr van Mierlo, Treasury minister Dan Tomlinson said: “The Government is committed to making sure older people can live with the dignity and respect they deserve in retirement. The state pension is the foundation of the support available to them.
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“Over the course of this Parliament, the yearly amount of the full new state pension is currently projected to go up by around £1,900 based on the Office for Budget Responsibility’s latest forecast.”
Mr Tomlinson said: “The personal allowance – the amount an individual can earn before paying tax – will continue to exceed the basic and full new state pension in 2025/26.
“This means pensioners whose sole income is the full new state pension or basic state pension without any increments will not pay any income tax.”
Figures released earlier this month, suggesting retirees will likely benefit from a 4.7% increase in the state pension from next April, has boost state pension payments.
The triple lock formula says that the state pension will rise in spring by the greater of 2.5%, the previous September’s inflation rate, or the increase in average earnings registered over the previous summer.
Because the earnings figure published on Tuesday morning is almost certain to be the highest of those three, it is likely the state pension will go up by 4.7% in April.
The triple lock means the new state pension – for those who reached pension age after April 2016 – is creeping closer to the £12,570 threshold at which tax becomes payable.