PENSIONERS TO LOSE '£800 A YEAR' IN REEVES' BUDGET

Older people will be hit hard if Chancellor doesn't increase tax-free allowance

- BY KATIE HARRIS and MARTYN BROWN

PENSIONERS will be left nearly £800 a year worse off if Rachel Reeves extends a freeze on the income tax threshold in this week's Budget, analysis claims.

The Chancellor is tipped to keep the tax-free allowance as it is until 2030.

Not raising it would cost OAPS some £7billion a year in 2029 and 2030, says research by the House of Commons Library.

Other analysis reveals that more than half a million pensioners would be drawn into the tax net by the freeze, with 9.3 million more than three quarters of all OAPs paying tax compared to 8.7 million currently.

Campaigners warned that the move would break Labour's election manifesto pledge not to raise taxes for working people.

Dennis Reed, director of over 60s group Silver Voices, said: “This smash and grab tax hike on pensioners must be stopped.

“If Rachel Reeves' plans are enacted in the Budget, an extra £14billion a year will be burgled from pensioners' pockets by 2030 - money that should be used to meet rising energy and food costs and to help grow the economy.

“Make no mistake: extending the freeze on lower tax thresholds is a major breach of the Labour manifesto, where no increases in income tax were promised. Freezing allowances is the same as raising income tax rates in terms of the effect on standards of living.

“Much of the £800 a year tax hit on older people will come from taxing the state pension and any triple lock increases, making a mockery of the formula to prevent rises in pensioner poverty.”

In Wednesday's Budget, the Chancellor will highlight that some 13 million pensioners will benefit from an above-inflation rise to the state pension next April because of the triple lock.