Keir Starmer has been warned against a stealth tax raid (Image: Getty)
Campaigners have warned Sir Keir Starmer that a stealth tax raid on the state pension would be an “insult” to older people. The Prime Minister has been accused of treating pensioners with contempt over the possibility of some who receive the new state pension paying income tax from next year.
Millions of Britain’s poorest older people face being dragged into an “old-age tax trap” as Chancellor Rachel Reeves scrambles to fill a growing black hole in the public finances. Over-60s campaign group Silver Voices, with the support of the Express, handed in a petition to 10 Downing Street with 115,000 signatures in March calling for the state pension never to be taxed.
It called for the Chancellor to increase the tax threshold for state pensioners and to commit to increasing the tax threshold in line with the triple lock increases in future years.
But three months on, the Treasury has finally sent an unsigned reply which rejects “exempting the state pension and other benefits” from income tax.
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Silver Voices’ director Dennis Reed said: “This disdainful anonymous reply from the Treasury is an insult to all older people, and two fingers to the 125,000 signatories to our petition, and shows how low pensioner concerns are ranked in the Treasury view of the world.
“We worry that this anti-pensioner attitude will carry forward to the autumn budget and that the old age tax trap will be deepened by extending the freeze on lower tax thresholds until the end of this Parliament. Any continuation of the freeze will be seen as yet another betrayal of the older generations and as a sneaky way to undermine the value of the state pension and the Triple Lock.
“But we are confident that the public will support our aim to stop the basic state pension from being taxed, just like they backed us up over winter fuel and to save the triple lock.”
HM Revenue and Customs has admitted that if the lower tax threshold remains in place, 3.4 million extra people over 70 years old will be sucked into the tax system for the first time over the next three years.
Mr Reed said: “We will redouble our efforts to get the lower tax threshold unfrozen, preferably for all, but, if not, for state pensioners. The old age tax trap must be ended this year”.
