New call to stop older people paying tax on State Pension ahead of annual uprating in April
09.01.2024 - 01:11
/ dailyrecord.co.uk
A new online petition is calling on the UK Government to remove income tax on the State Pension to “reduce the tax burden on pensioners”. The personal tax allowance threshold will remain frozen at £12,570 during the 2024/25 financial year, which means that older people with an income of more than £242 per week may have to pay income tax.
Following the annual uprating, confirmed at 8.5 per cent by Chancellor Jeremy Hunt during the Autumn Statement, from April 8, someone on the full New State Pension will see their payments go up from £203.85 per week to £221.20 and as payments are typically made every four weeks, this amounts to £884.80 each pay period. Over the 2024/25 financial year, this is an increase of £902, taking the annual income from State Pension alone from £10,600 to £11,502.
This leaves just £1,068 before the personal tax threshold is exceeded, so anyone with additional income of £89 or more per week - on top of State Pension - may receive a tax bill the following year.
Similarly, someone on the full rate of the Old or Basic State Pension will see payments go up from £156.20 per week to £169.50 - this amounts to £678 each pay period. Over the 2024/25 financial year, this is an increase of £692, taking the annual income from £8,122 to £8,814.
This leaves just £3,756 before the personal tax threshold is exceeded, equivalent to additional income totalling £313 per month.
The ‘Make State Pensions tax free’ petition, posted on the petitions-parliament website states: “The Government should remove income tax on State Pension payments, to reduce the tax burden on pensioners.
“As the personal tax allowance has been frozen, some pensioners will now need to fill in a tax return. We believe income from State Pensions