Rachel Reeves under pressure over “cruel” pensions raid | Politics | News
Express demands Rachel Reeves change course (Image: Getty)
The Express today calls on Rachel Reeves to reverse a “brutal secret raid” that will force the poorest pensioners to pay income tax. Our Stop Labor Pensions Tax campaign demands that the Chancellor take immediate action to protect the dignity of older people.
This came after we announced that another million people would be harmed by freezing the income tax threshold because he had vastly underestimated the number that would be affected. That figure could rise further amid warnings that the Middle East crisis will push inflation to 3% this year. Ms Reeves has previously promised that retirees whose only income is a state pension will not pay income tax.
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Shadow chancellor Sir Mel Stride slams Labour’s broken promises (Image: Getty)
Shadow Chancellor Mel Stride said: “Rachel Reeves promised to end the tax threshold freeze, then made a hard U-turn and extended it for years.
“This means retirees will be increasingly dragged into the tax net, even if the State Pension is all they have to live on.”
Sir Mel, who will today (Wednesday) launch a Conservative Party campaign demanding a U-turn from the government, added: “Last week we learned that a million more pensioners would be dragged into paying tax than previously thought because of this policy, but the Chancellor did nothing.
“Workers are struggling to find a temporary solution.
“Meanwhile, pensioners are left in the dark about whether they will have to pay. Labor would rather spend billions of dollars on benefits than give people security in retirement.”
The details were hidden in last week’s Office for Budget Responsibility forecasts, which revealed the UK’s record tax burden would rise more than previously expected.
Ms Reeves announced in November that the amount of annual income that triggers an income tax bill would remain at £12,570 until 2031, when she set her Budget.
The OBR said this would result in an additional million people receiving state pensions being made liable to income tax by 2030/31.
Former pensions minister Sir Steve Webb, a partner at pensions consultants LCP, said this low estimate reinforced the need for a “full review” of the starting point of income tax, particularly for pensioners.
Dennis Reed, founder of Silver Voices (Image: Rowan Griffiths / Daily Mirror)
Dennis Reed, director of over-60s campaign group Silver Voices, said: “The government has quickly become bogged down on this issue and they need to do a 180 degree turn and go back the way they came.
“This is a brutal pension tax grab by the state from someone who promised that lower pensions would not have to pay tax.”
While the value of the state pension has risen over the last few years due to the triple lock that guarantees annual increases at the highest of inflation, wage growth or 2.5%, successive chancellors have frozen the threshold at which people start paying tax.
This means the value of the state pension will exceed the nil-rated individual allowance from 2027/28; Therefore, seniors whose only income is a state pension will be forced to pay income tax on payments for the first time.
At the last election, the Conservative Party promised a “triple lock plus”, which included a pledge to introduce tax cuts to prevent people who only receive state pensions from being dragged into paying income tax.
The Conservative Party is demanding the Chancellor raise Personal Expenditure from £12,570 or create a special exemption for those caught in the net.
Shadow Work and Pensions Secretary Helen Whately said: “Pensioners have worked hard, paid their taxes and built this country.
“They should not be dragged into paying income tax on their State Pension because of Labour’s flawed tax policy.
“The State Pension aims to provide security and dignity in retirement. The Conservatives will defend pensioners and fight Labour’s Pension Tax so that those who have done the right thing throughout their lives will not be penalized in retirement.”
A change.org petition to stop the taxation of state pensions has now reached more than 200,000 signatures.
The OBR warned on Tuesday that inflation could be 1% higher in 2026 due to the Iran conflict.
This could affect the rate at which pensions grow under the Triple Lock rules and drag them further into paying tax.
The Treasury was contacted to get an opinion on the issue.
