900,000 facing tax bill on pensions for the first time

ALMOST 900,000 pensioners will find themselves dragged into the tax trap for the first time this year.

- Sarah O'Grady

Frozen thresholds and the rising state pension mean many more women in particular will get unexpected demands.

Those most at risk are claiming the marriage allowance.

Former pensions minister Sir Steve Webb, now a partner at pension consultants LCP, said: "People who are by no means well off can find themselves having to deal with the hassle of the tax system and are having tax deducted from their pensions, often for the first time.

"Far too many pensioners are now finding themselves in the tax net as a result of the long-term and stealthy freeze on tax-free personal allowances. This cannot continue."

Official figures show how more pensioners have been dragged into the tax trap.

In 2015-16, 6,490 aged 65-plus paid tax. In 2023-24, this is expected to increase to 8,500.

Ken James, of Contractor Mortgage Services, said: "This will drive many elderly people ever deeper into poverty and despair.

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"The fact that many have not experienced having to pay these taxes before will put an extreme amount of pressure on already fragile finances.