Healey to shield low-income pensioners from income tax in the Budget
Changes are needed to prevent the full, flat-rate state pension becoming liable for income tax after it rises in April.
Low-income pensioners will be spared from income tax in Chancellor John Healey's first Budget on Wednesday, according to reports. The basic state pension is set to rise by 3.9% to £13,036.40 annually, starting April 2024. This higher pension amount would have pushed individuals who rely solely on the state pension above the £12,570 personal tax allowance, potentially subjecting them to income tax payments without modifications.
However, the government has assured that pensioners receiving only state pension income would remain exempt from taxation. Healey will unveil his pledge for a new tax allowance tailored to low-income pensioners during his Budget speech. Meanwhile, the Conservative Party and Reform UK are unveiling their own Budget proposals, which include significant cuts to the welfare bill.
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