A triple lock increase of 5% or more will take the new state pension over the personal allowance (Image: Getty)
Rachel Reeves is under pressure to stop pensioners from being skewered with a further hit to their finances as an online petition continues to grow. More than 80,000 people have singed the petition started by campaign group Silver Voices as they call on the Chancellor to stop pensioners from being taxed on their state pension.
Triple lock increases and frozen thresholds have left OAPs at risk of being taxed on their state pension, which for many, is their only source of income. Labour pledged to maintain the triple lock - which sees the state pension go up each year by whichever is highest out of 2.5%, inflation, or average earnings growth - in its election manifesto. Silver Voices director Dennis Reed said: “Because of the Silver Voices/Daily Express campaign it was impossible for the government of the day to scrap the vital triple lock, but now Labour is intending to erode it by stealth.”
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The petition was started by Silver Voice's David Reed (Image: Getty)
Mr Reed warned that countless other pensioners could begin to see their pension taxed from early next year with frozen tax personal allowances meaning that many might cross the current personal allowance of ￡12,570 in 2026.
He added: “If the basic state pension starts being taxed it undermines the whole principle of a safety net in retirement to ensure that the basic necessities in life can be afforded. And if Triple Lock increases each year are also taxed then that safeguard, to protect against sudden increases in the cost of living, is also undermined.”
The Chancellor, who has already fallen foul of the pensioner community over her decision to scrap the winter fuel allowance, will deliver her spring statement on March 26. The tax-free personal allowance has been frozen at ￡12,570 until 2028, but the new state pension is due to increase to ￡11,973 next month.
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A triple lock increase of 5% or more in April 2026 will take the new state pension over the personal allowance.
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The Chancellor has faced significant criticism for her decision to remove the winter fuel payment (Image: Getty)
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But if it does not exceed the threshold next year, it will the year after as the triple lock means there will be a rise of at least 2.5% in April 2026 and 2.5% in April 2027.
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Independent Age director of policy and influencing said: “Many of the older people on a low income that we support are worried about the prospect paying income tax on their state pension. These are people that are already cutting back on essentials like food and heating. Their budgets are already stretched to breaking point.
“By April, the gap between the new state pension and the tax-free personal allowance will be less than ￡1000. This will lead to people with small private pensions facing taxation that will put their finances under even more strain.
“We should all be able to live a later life in financial security, to live well rather than just survive. We need a consensus among all the political parties on the adequate income needed to prevent poverty in later life. Following this, long-term plans must be put into place to ensure every older person is able to receive this amount.”