Chancellor Rachel Reeves is facing accusations of treating pensioners as "an easy target" as Parliament debates a petition calling for a reversal of a tax hike affecting millions of older people. The petition, signed by 119,000 individuals, demands relief for pensioners after Reeves announced that tax thresholds will be frozen until April 2031. This means a million people relying entirely on the state pension will be forced to pay income tax, while millions more with modest private or workplace pensions have already been dragged into the tax system.
Triple Lock Promise Questioned
Critics argue that the freeze undermines Labour's commitment to the Triple Lock, which ensures the state pension rises with inflation or average incomes. The petition calls for a new tax code for state pensioners, with a threshold double the basic rate, stating: "Pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax."
Campaigners Speak Out
Sally Tsoukaris, general secretary of the Civil Service Pensioners’ Alliance and spokesperson for Later Life Ambitions, said: "Pensioners have worked hard, paid tax throughout their lives and planned for retirement on the basis that the state pension would provide some security. They shouldn’t now be dragged into paying more tax by stealth." She added: "If the Government is serious about dignity in later life, it needs to stop treating pensioners as an easy target."
A separate petition from Silver Voices, with 208,000 signatures, urges a £1,000 increase in the tax threshold for state pensioners, with annual rises in future years.
Fiscal Drag Impact
The state pension currently stands at £12,547 annually for full recipients, while the income tax threshold has been frozen at £12,570 since 2021. Reeves extended the freeze until the 2030-31 financial year in her Budget, meaning the state pension will become taxable from next year—a process known as fiscal drag. The Office for Budget Responsibility warns an additional one million people will eventually be brought into paying income tax.
Dennis Reed, director of Silver Voices, said: "This would lead to the ludicrous situation of the state pension safety net, which has already been paid for through national insurance and tax, being taxed again. Many more pensioners across the country would be plunged into poverty as a result of political choice."
Government Response
Ministers previously promised that those whose sole income is the basic or full new State Pension would not pay income tax, but details remain unpublished. A Treasury spokesperson said: "Anyone whose only income is the full new or basic State Pension without any increments will not pay income tax and we are committed to that over this Parliament. By keeping the Triple Lock, 12 million pensioners will see their income rise by up to £470 this year, and they continue to benefit from the highest Personal Allowance in the G7."
Rising Retirement Costs
Research by Loughborough University academics found that maintaining a "minimum retirement lifestyle" now costs £13,900 a year for a one-person household, up £500 from last year, or £22,500 for a couple, up £900. This covers housing, food, heating, occasional public transport, and one UK holiday annually. The state pension falls short, and trade body Pensions UK warns only 82% of working-age people are saving enough into an additional pension to meet basic needs, with just 23% on track for a "moderate" lifestyle including a car and two weeks abroad.
Council Tax Support Gaps
Charity Independent Age found only half of eligible households claim Council Tax Reduction in England, leaving £1.71 billion in support unclaimed. Ensuring every eligible older person receives the benefit would lift 74,000 out of poverty. The reduction can cut an average bill from £2,392 to zero. Chief Executive Joanna Elson said: "Both the UK Government and local authorities have a role to play in ensuring Council Tax Reduction is well publicised and reaching those that need support."
