Silver Voices call for tax on state pension to be scrapped
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Pension: Expert discusses state pension tax
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Campaigners have warned Rachel Reeves that taxing the state pension would be a “fundamental mistake”. Dennis Reed, director of over-60s campaign group Silver Voices, handed in a petition with more than 117,000 signatures to Downing Street ahead of the Chancellor’s spring statement on Wednesday.
He said: “We’ve submitted a petition to stop the state pension being taxed. 660,000 older people were brought into the tax system last year because the tax thresholds are frozen. The longer they stay frozen, the more older people come into the system. We’re getting to a situation now where state pension entitlements, like widow’s pensions and additional earning pensions, are all being taxed. It’s outrageous because you contribute your national insurance and tax throughout your working life in order to get a state pension. "
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Describing it as a "fundamental mistake", he added: “To tax it again is a double whammy.”
The campaign group fears older people on modest incomes will be pulled into paying income tax due to triple lock increases and frozen thresholds. Silver Voices has called for the personal allowance for pensioners to be raised by ￡1,000 next month, then in line with the triple lock going forward.
It has been frozen at ￡12,570 until 2028, but the new state pension is catching up as it is due to increase to ￡11,973 next month. Under the triple lock, the state pension rises each year by whichever is highest out of 2.5%, inflation, or average earnings growth.
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And the state pension could surpass the personal allowance from as early as next year if there is a triple lock boost of 5% or more in April 2026. 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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Rachel Reeves will give her spring statement on Wednesday (Image: Getty)
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Frozen thresholds have already seen hundreds of thousands of older people dragged into the taxman's net.
The number of pensioners paying income tax rose from 7.85 million in 2023/24 to 8.51 million in 2024/25, an increase of 660,000.
A Treasury spokesman said: “We are committed to help our pensioners live their lives with dignity and respect, which is why we have frozen fuel duty and increased the state pension to leave pensioner couples up to ￡88 better off a month. Our commitment to the triple lock means millions will see their pension rise by up to ￡1,900 this parliament.”