Parliament to debate a new tax code for state pensioners

In advance of the Westminster Hall debate on the State Pension tax threshold, Alan Lees, Chief Executive of the National Association of Retired Police Officers and a spokesperson for Later Life Ambitions (LLA), said:

“The growing number of pensioners being dragged into paying income tax is a direct consequence of frozen tax thresholds and rising living costs. Millions of older people who have worked hard, paid into the system and done the right thing throughout their lives now face the prospect of paying more tax simply because the State Pension is increasing to keep pace with inflation.

“The fact that more than 119,000 people signed this petition shows the depth of concern among older people across the country. Pensioners should not be penalised for receiving a State Pension that helps them meet everyday costs. A higher personal allowance, as proposed, would ensure that those with small private or workplace pensions are not taxed unfairly.

“As Parliament debates this issue, Ministers must recognise that frozen tax thresholds are eroding the value of pension incomes and placing additional pressure on older people who are already facing rising bills. The Government should set out how it will ensure that pensioners on modest incomes are not unfairly drawn into paying more tax year after year.

“LLA believes any future reform must be underpinned by a Minimum Income Guarantee, linked to the real cost of living a decent and dignified life in later years.”

LLA’s Budget for Later Life calls for the State Pension and related benefits to meet a Minimum Income Guarantee for all older people, covering essentials such as housing, energy, food, water, transport, personal care, clothing, communications and participation in community life. LLA says this guarantee should be reviewed annually to reflect changes in the cost of living