New research by the Lib Dems warns nearly three million State Pensioners will be dragged into the retirement tax net.
The Liberal Democrats have warned that more than one million people over State Pension age are set to be dragged into paying income tax by the 2027/28 financial year due to the UK Government’s ‘stealth tax freeze’. According to new research commissioned by the party, when the Personal Allowance tax freeze expires in 2027/28, the income threshold will have risen to £15,990.
Separate analysis from the Resolution Foundation has found that freezing income tax thresholds will leave the average taxpaying pensioner £1,000 worse off by 2027/28, or a collective hit of £8 billion. Top Money Stories Today Baroness Altmann, a former Tory pensions minister, told the Telegraph: “I do think it is worrying that so many more pensioners could be dragged into the tax net as the state pension may soon rise above the frozen threshold.
“Now the economy is turning a corner, we have cut National Insurance by a third, meaning that, coupled with above-inflation increases to personal tax thresholds since 2010, we have saved the average earner over £1,500 compared to what they otherwise would have paid.”
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