HMRC tax policy 'threshold' alert as questions raised over 'fairness' View Image

A warning has been issued after Chancellor Rachel Reeves confirmed a major change to tax on the state pension. The news is a welcome boost for pensioners but experts have warned it points to a particular disparity. The Government has confirmed that people whose only income derives from the state pension will remain exempt from income tax, even when state pension payments rise beyond the personal allowance.

The full new state pension is now very close to exhausting the entire £12,570 tax-free threshold, with the payment set to soon become liable for income tax. The current full rate stands at £230.25 weekly, equivalent to £11,973 annually.

State pension payments are set to rise by 4.8 per cent this coming

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