Chancellor faces pressure not to tax state pensions

Rachel Reeves, the Chancellor, is set to address Parliament on Wednesday about the economy. Ahead of this statement, campaigners are raising concerns about possible tax changes affecting state pensions. Dennis Reed, from the over-60s group Silver Voices, warned that taxing state pensions would be a "fundamental mistake." He delivered a petition with over 117,000 signatures to Downing Street. Reed stated that 660,000 more older people were taxed last year due to frozen thresholds. As these thresholds remain unchanged, more seniors may be pulled into the tax system. Reed emphasized that many pensions, including widow's and additional earnings pensions, are now being taxed. He criticized this approach as double taxation since people pay national insurance and taxes during their working lives to receive a pension. Silver Voices is urging the government to raise the personal allowance for pensioners by £1,000 starting next month. Currently, the personal allowance is frozen at £12,570 until 2028, while the new state pension is set to rise to £11,973 next month. Under the triple lock system, the state pension increases each year based on the highest of three factors: 2.5%, inflation, or average earnings growth. If the state pension increases significantly, it may exceed the personal allowance by next year or the year after. Recent data shows that the number of pensioners paying income tax rose from 7.85 million to 8.51 million recently. A Treasury spokesman stated that the government is committed to supporting pensioners by freezing fuel duty and increasing pensions, which could provide significant benefits for many seniors.