\n In the Budget this week, the Chancellor extended the period during which the personal allowance will be set at \u00a312,570 until April 2031.\n<\/p>\n
\n When combined with factors such as inflation, wage growth and the state pension triple lock, the policy of freezing allowances means that most taxpayers pay more in income tax in a phenomenon known as \u201cfiscal drag\u201d.\n<\/p>\n
\n The Scottish Pensioners’ Forum (SPF) has warned more pensioners with already limited incomes will find themselves dragged into paying income tax for the first time, reducing the real value of their state pension.\n<\/p>\n
\n The SPF is arguing that those pensioners just above the pension credit threshold, many of whom already struggle with household bills, heating costs, and escalating food prices, will be disproportionately impacted.\n<\/p>\n
\n READ MORE: Two BBC Question Time audience members agree Budget is good<\/a>\n<\/p>\n \n David Edwards, SPF chair, said: \u201cThis threshold freeze isn\u2019t fiscal prudence \u2013 it\u2019s a stealth tax on those who can least afford it.\n<\/p>\n \n \u201cLow-income pensioners aren\u2019t suddenly earning more; they\u2019re simply being punished because the tax threshold stands still while everything else gets more expensive.\n<\/p>\n \n \u201dCalling this responsible budgeting is like patching a leaking roof with wallpaper. It solves nothing.\n<\/p>\n \n \u201cThis decision is up there with the incompetence and lack of sensitivity they displayed over the winter fuel allowance last year. It truly does beggar belief.\n<\/p>\n \n “The SPF is urging the UK Government<\/a> to re-evaluate the freeze.”\n<\/p>\n \n Political economist Professor Richard Murphy told The National the personal allowance should be around \u00a316,000 “at least” accounting for “quite significant” inflation.\n<\/p>\n \n He called it a “sneaky way” to raise taxes and said it was a “failure” of the trusting relationship that should exist between a government and its people.\n<\/p>\n \n If the personal allowance had been adjusted in line with inflation, it would be \u00a315,480 for 2025\/26, a difference of \u00a32910.\n<\/p>\n \n READ MORE: UK Government accused of trying to ‘run Scotch whisky into the ground’<\/a>\n<\/p>\n \n As a result, taxpayers with incomes of \u00a315,480 or more will pay at least \u00a3582 more in income tax for 2025\/26.\u00a0\n<\/p>\n \n The Office for Budget Responsibility estimates that, for 2030\/31, the personal allowance would be \u00a34920 higher if it had been increased with inflation.\n<\/p>\n \n Katherine Ford, technical manager for personal tax at the Institute of Chartered Accountants in England and Wales, said: \u201cFreezing the personal allowance means that more people are brought into the tax system, many of whom will be pensioners as the state pension continues to rise, adding to already considerable strain on HMRC\n<\/p>\n \n \u201cIt is important that HMRC has the resources it needs to give taxpayers the help they deserve.”\n<\/p>\n \n Rachel Reeves<\/a> did, however, confirm to Money Saving Expert founder Martin Lewis<\/a> this week that those whose only income is the state pension will not pay income tax in this parliament.<\/p>\n","protected":false},"excerpt":{"rendered":"In the Budget this week, the Chancellor extended the period during which the personal allowance will be set…\n","protected":false},"author":2,"featured_media":288401,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":{"0":"post-288400","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-personalfinance","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/288400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=288400"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/288400\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/288401"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=288400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=288400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=288400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}