Martin Lewis questions State Pension tax protection clarity

Summarised from 2 outlets · Updated 22 Oct, 15:02 · Archive

Martin Lewis has challenged the Chancellor over how pensioners will be protected from income tax as the State Pension rises above the frozen allowance.

Money Saving Expert founder Martin Lewis has challenged Chancellor John Healey over how the Government will protect pensioners from paying Income Tax as the full new State Pension rises above the frozen personal allowance next April.

Lewis highlighted that the full new State Pension is expected to rise to around £13,040 a year from April 2027, while the Income Tax personal allowance remains frozen at £12,570. This means someone receiving the full new State Pension would ordinarily have income above the tax-free threshold. The Government has promised to honour former Chancellor Rachel Reeves' commitment that pensioners whose only income is the State Pension will not pay Income Tax.

Lewis questioned whether this protection could create a cliff edge for those with even small additional income. He asked what would happen if a pensioner received just £30 a year from a small workplace pension from a previous job, suggesting they could face around £100 in tax for that small income. He also raised concerns about whether a small amount of savings interest could affect eligibility for the protection, even where the interest was covered by the starting rate for savings.

Lewis warned that the rules need to be clarified ahead of the Budget.

How it is being reported

• Martin Lewis raises fresh alarm over State Pension personal allowance ahead of BudgetMartin Lewis has challenged Chancellor John Healey over how the Government will protect pensioners from paying Income TaxKeighley News · 22 Oct, 14:23
• Martin Lewis raises fresh alarm over State Pension personal allowance ahead of BudgetMartin Lewis has challenged Chancellor John Healey over how the Government will protect pensioners from paying Income TaxWharfedale Observer · 22 Oct, 14:23

In this story: Martin Lewis · John Healey · Rachel Reeves · Money Saving Expert

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