A warning has been issued to around two million pensioners who could be sucked into paying more tax. Pension expert Adam Pope from Spencer Churchill Claims Advice has voiced concerns over the impact of freezing income tax thresholds on pensioners.
He has warned that nearly two million pensioners could face increased tax burdens over the next four years, leading to financial strain and worse living standards.
He said: “Freezing income tax thresholds for pensioners is worrying and could really affect their financial situation. Almost two million pensioners are expected to be hit by this in the next four years, meaning many of them will have to pay more tax.
“This is especially tough for those mainly living off the State Pension. With no change in the tax thresholds, they could find themselves owing more tax than they expected, making things hard if they don’t have much to begin with.
“As the State Pension amount goes up, more pensioners could have to pay more tax, making life harder for those already struggling. Over 60% of pensioners are paying income tax, up from about 50% in 2010.
“What’s more, keeping income tax thresholds the same could mean pensioners have less money to spend. By 2027-28, the average tax-paying pensioner could be £1,000 worse off which could really affect their living standards and financial safety.
“While the Government is cutting national insurance taxes for workers, it seems they’re not paying enough attention to pensioners' money worries. It’s important for those making policies to think about the needs of pensioners too, especially those who can’t earn more money.
“Given all this, it’s clear that we need to look again at how income tax policies affect pensioners and find ways to protect their money. Listening to what pension experts and groups fighting for pensioners say is key to making sure the tax system is fair for everyone, including those living on a fixed income.”
