REEVES URGED TO STOP STATE PENSION BEING TAXED

Campaigners warn of 'ludicrous' prospect for OAPs

- Katie Harris

LABOUR must act urgently to ensure that state pensions are never taxed, campaigners insist.

They warned Chancellor Rachel Reeves that OAPs who have no other income risk being dragged into paying tax due to frozen thresholds.

The tax-free allowance has been held at £12,570 until 2028 while the new state pension is due to rise to £11,973 a year from April. An increase of 5% or more in 2026 will take it over the allowance, incurring tax. The Silver Voices campaign group wants the personal allowance to be boosted for pensioners by £1,000 from April then uprated in future on the same basis as the triple lock guarantee to prevent pensions from being taxed.

Dennis Reed, its director, said: "In her spring financial statement on March 26, the Chancellor must take urgent action to prevent the basic state pension from being taxed from April 2026.

"Because of the frozen tax personal allowances, and depending on the size of the triple lock increase due next year, the top of the new state pension may breach the current tax-free personal allowance of £12,570.