UK Exempts Retirees From Tax on £13,000 State Pension as 3.9% Wage Growth Lifts Payout
Updated
Updated · The Guardian · Sep 15
UK Exempts Retirees From Tax on £13,000 State Pension as 3.9% Wage Growth Lifts Payout
3 articles · Updated · The Guardian · Sep 15
Summary
No 10 said pensioners with no other income will not pay tax on the full new state pension, after a 3.9% earnings-linked rise would otherwise have pushed it above the £12,570 personal allowance.
From next April, the full new state pension is set to increase from £241.30 a week to £250.70—about £13,000 a year—while the old basic state pension would rise to £192.10 a week.
Ministers said the exemption will spare retirees from paying small amounts of tax during this parliament, with details due in next month’s budget as the move adds pressure on public finances.
The pledge lands amid wider scrutiny of the triple lock, with the British Chambers of Commerce urging it be scrapped and savings redirected to tackle youth unemployment.
The pension decision came alongside signs of a cooling labour market—vacancies fell to 702,000 and unemployment held at 4.9%—complicating the Bank of England’s rate decision as oil tops $107 a barrel.