Birmingham Live reports that over nine million state pensioners are to be hit with what they term as Labour Party's ‘retirement tax’ next year when the triple lock will rise by 5.5% or £600 to £12,631 meaning it will breach the personal allowance which has been frozen by Rachel Reeves until 2029.
The paper says that as a result, nine million pensioners will pay tax on their income from April 2026.
This claim is based on a forecast by Deutsche Bank that growth in average weekly earnings will reach 5.5 per cent in July – higher than the projected inflation figure:
They therefore predict the triple lock will rise by the same amount in April 2026. Sanjay Raja, the bank’s chief UK economist, said the bank was confident in its forecasts, adding: “As of right now, our projection for AWE in the three months to July sits at 5.5pc year on year.
“Our September 2025 CPI projection sits just around 4.25 per cent. Therefore, based on our current projections we see state pensions rising by 5.5pc in April 2026.” Sir Steve Webb told the Daily Mail HM Rvenue and Customs may not decide to pursue the low amount of tax due in the first year.
Sir Steve, now a partner at LCP, said: “Pensioners may well have spent the money because the bill isn’t known until after the tax year so people will have to set aside a bit of their pension.
"We’re not talking about rich pensioners.”
Whether this forecast turns out to be correct or not, it is inevitable that while the personal allowance remains frozen more and more people on a low income will be dragged into paying tax. That will include millions of pensioners.
These hidden tax rises are the responsibility of successive Tory and Labour governments. Isn't it time they came clean about the consequences of this policy?
Taking money off POOR pensioners by stealth. The rich will see no difference.
ReplyDelete