More pensioners facing tax warning due to ‘unfair’ policy
More pensioners are being forced to pay tax.
Older people with just tiny private pensions have been warned they could be targeted by HMRC.
The Government is coming under increasing pressure over frozen tax bands which are seeing more pensioners being dragged in to paying tax.
The personal allowance – the amount when people start paying income tax – has stayed frozen at £12,570 since 2021.
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And over that time pension payments have gone up due to annual increases, pushing more seniors towards or over the £12,570 limit.
The new state pension is due to rise by at least another £299 from next April to £12,272.
And while it won’t be enough to take the state pension amount over the personal allowance yet, it will only take a small private pension or other small forms of income to do so.
HMRC will then come calling for tax.
Tax bands are currently due to stay frozen until 2028 and there is growing frustration among campaigners.
Conservative leader Kemi Badenoch has accused Labour of placing a “retirement tax” on pensioners.
She said recently: “Under Labour, millions of our poorest pensioners face being dragged into income tax for the first time ever.
“Does the Prime Minister think it is right that struggling pensioners should face a retirement tax?”
Keir Starmer said in response: “We will stick to our manifesto commitments, we will stick to our fiscal rules.
“This is a language they (the Conservatives) don’t understand. That’s what got us into the problem in the first place.”
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