Pensioners just above threshold shouldn’t pay income tax, says No 10 – UK politics live | Politics
No 10 says government still committed to ensuring pensioners only just above tax threshold next year won’t pay income tax
The wage growth figures out today mean that the state pension is likely to rise by 3.9% next year. That is because, under the triple lock, the state pensions rises in line with earnings, prices or 2.5%, whichever is higher. Today’s figures are the ones for the earnings benchmark, and it is unlikely that the relevant inflation figure will be higher when it comes out. So next year the state pension should rise in line with earnings – by 3.9%.
As a result, pensioners should get an increase of £488 next year, taking the annual payment over £13,000. That means they will be above the £12,570 tax-free personal allowance.
Rachel Reeves anticipated this when she was chancellor and, in her budget last year, which confirmed a freeze in the personal allowance, she said that anyone who receives the state pension but no other income will not have to pay income tax before 2030.
In interviews this morning, Jonathan Reynolds, the business secretary, repeatedly refused to confirm that the government would commit to this promise. He just said it was a matter for the chancellor.
At the Downing Street lobby briefing this morning, No 10 said the Reeves promise still held.
The PM’s spokesperson said:
In line with the commitment made at the budget in 2025, pensioners who only just the personal allowance will not have the administrative burden of paying small amounts of tax in this parliament.
The chancellor will set out further details on how that commitment will be delivered at the budget shortly.
And work is already underway to ensure anyone whose only income is the full new or basic state pension, without any increments, will not pay income tax in this parliament. We’ll set out further details in due course.
The spokesperson did not say how the Treasury would decide if pensioners “only just” passed the income tax threshold.
Asked if this pledge would only apply to people relying entirely on the state pension, or whether it might include pensioners with a small private pension income, the spokesperson just said further details would be issued in due course.
Key events
Irish PM claims Sinn Féin may have set back cause of Irish unity by alliance with SNP and Plaid Cymru
Micheál Martin, the Irish PM (taoiseach) has suggested Sinn Féin may set back the cause of Irish unity by aligning itself with Scottish and Welsh pro-independence parties.
As the Press Association reports, Martin, who is leader of Fianna Fáil, questioned whether Sinn Féin was on the right strategic track after the party signed a memorandum of understanding with the SNP and Plaid Cymru to put pressure on the UK government to call unity referendums in Scotland, Northern Ireland and Wales.
Speaking to the media today, Martin was asked about Michelle O’Neill, the Sinn Féin leader in Northern Ireland, saying at yesterday’s event that he was not doing enough to advance the cause of Irish unification. He replied:
Fundamentally, I would disagree.
I’m not into campaigning, but I would make the point that strategically we have never embroiled Northern Ireland in British politics.
We’ve always identified the north as exceptional, as being an issue in terms of the partition of Ireland.
And I think strategically I’m not clear that Sinn Féin is on the right track at all, and may even set back unity by that move that they’ve made.
Martin said Fianna Fáil was a party that believes in Irish unity. But he said his current focus is on progressing new mechanisms to deal with the legacy of the Troubles and on examining reforms to the institutions established under the Good Friday agreement.
No 10 insists that government planning ‘enhanced residency’ test for donors before Reform UK got its £72m
Downing Street is pointing out that the government was talking about an “enhanced residency” test for Britons newly arrived in the UK who donate to political parties back in August. At the lobby briefing earlier, the PM’s spokesperson faced claims that ministers are only talking about this now in response to the recent news about Ben Delo and Christopher Harborne giving Reform UK £72m. Part of the reason why this allegation sounded plausible is that the spokesperson was unable to clearly show that this was something on the government’s agenda before the £72m story broke. (See 1.41pm.)
It now emerges that, on a Saturday at the end of August, the Ministry for Housing, Communities and Local Government sent out a press release that mentioned a proposal for “enhanced UK residency requirements for donors seeking to give more than £100,000”. It was not published online. But on Tuesday 1 September MHCLG sent out a briefing note to journalists saying:
We’re planning a new test to stop wealthy people living overseas giving huge donations to political parties despite not living in the country. This will make sure donors have a genuine connection to the UK, rather than simply appearing to live here.
In the Commons Yvette Cooper, the health secretary, is making a statement about the Lucy Letby inquiry report. Tom Ambrose is covering that on a seperate live blog.
Nandy to raise online abuse of RNLI volunteers in talks with social media firms
Lisa Nandy, the culture secretary, has told RNLI volunteers she will raise online abuse and so-called doxxing in talks with social media platforms as she looks into taking further action to target it, the Press Association reports. PA says:
Nandy has written to RNLI staff and volunteers to express her support and tell them she was “shocked and saddened” to see them targeted during anti-migrant protests in Portsmouth and Dover earlier this month.
The head of the RNLI has said that recent protests generated “deliberate misinformation” about the charity after footage posted on social media showed volunteers labelled as “traitors” after helping a dinghy to safety in Portsmouth.
Nandy told the Commons last week she was “personally concerned” about doxxing, when a person’s private information is shared online without their consent, and had already held an initial discussion with some tech companies about the practice.
She will convene a roundtable this afternoon with social media companies to discuss harmful online content.
In the letter she wrote: “I was shocked and saddened to see RNLI staff and volunteers targeted during the unacceptable intimidation that took place during the weekend of 5-6 September in Portsmouth and Dover, both in-person and online.
“This behaviour is not acceptable and we will not tolerate it.
“I know that the police are working with you to ensure that your staff and volunteers are safe.
“They have my backing, and I am keen to explore with you what more we can do to protect staff and volunteers from targeting and abuse.”
A Labour MP has attacked government plans for a levy on overnight tourism, describing it as the “wrong tax at the worst time”.
Speaking in the Commons during an urgent question on the visitor levy, Emma Lewell warned that introducing the tax would place an extra burden on businesses in her South Shields, Tyne and Wear constituency, which could “tip my local industry over”.
She said:
South Shields tourism is largely made up of families from neighbouring regions who have saved hard all year round to spend a few days at the seaside – they will not come, even if the increase is marginal.
My constituents, family-run B&Bs, caravan parks, hotels and the wider hospitality industry have been unequivocal with me that they do not want this. It is the wrong tax at the worst time.
This extra burden on their business will tip my local industry over. Devolution only works when it reflects what communities want.
In response, Jim McMahon, the local government minister, said it would be up to local leaders to decide whether or not to impose the tax. The tax could provide revenue to improve communities, he said.
No 10 rejects claim new ‘enhanced residency test’ for donors just ploy to stop Reform UK getting its £72m
Downing Street has rejected claims that the government is toughening up its restrictions on parties getting donations from Britons who recently lived abroad as a direct response to the £72m being donated to Reform.
The money has come from Ben Delo and Christopher Harborne, who are both cryptocurrency billionaires who have been living overseas but who have returned to the UK.
At the morning lobby briefing, the PM’s spokesperson confirmed that, in addition to the restrictions already announced, tighter residency rules will be introduced.
But he insisted this was not related to the Reform UK donations – even though plans for the tighter residency rules have only been made public in recent days.
Confirming that the government will toughen the rules, the spokesperson said:
Eligibility to make donations over £100,000 will be based on donors being registered to vote as a resident in the UK, not overseas.
Under the overseas elector donation cap, this means that in order to make a donation, an individual must be registered to vote as a resident in the UK for a minimum residency period. That period is the remainder of the calendar year in which they moved, and then a further full calendar year.
We’re also looking to introduce an enhanced residency test for political donors. These enhanced rules will mean you also have to demonstrate an ongoing presence in the UK, details of which will be set out shortly.
And that’s because, as the business secretary set out this morning, we firmly believe it’s right that those contributing to politics in the UK reside in this country, and that foreign money shouldn’t be used to interfere in UK elections and politics.
The spokesperson did not say whether this “enhanced residency test” would be introduced through amendments to the representation of the people bill as it goes through the Lords, or whether it would come in separately.
Asked if the test would be based on people paying taxes in full in the UK, the spokesperson just said details would be set out shortly.
When it was put to the spokesperson that the government had not mentioned an enhanced residency test before the weekend, the spokesperson declined to say when the government started working on this aspect of the plan to block large donations from Britons living abroad.
When it was put to the spokesperson that this looked like a move just intended to stop Reform UK getting the £72m offered by Harborne and Delo, the spokesperson replied:
No, I completely reject that. As the business secretary set out [in interviews this morning], this isn’t about political parties. He said it’s reasonable that people who contribute vast sums to political parties in the UK should have a stake in the UK.
The spokesperson also dismissed claims that the legislation was unfair because it was retrospective (in the sense that it will apply from when the plan was announced, in March, not from when the bill actually becomes law, later this year or next year).
The spokesperson said:
Retrospective legislation isn’t a new concept. We’re clear on why these moves are required, and that was in order to make sure that people couldn’t pre-empt the legislation between the date the plans were announced and then coming into force here.
UPDATE: After lobby No 10 told journalists that on 29 August the Ministry of Housing, Communities and Local Government issued a press releasing that mentioned “enhanced UK residency requirements for donors seeking to give more than £100,000”. But many lobby journalists are saying they never saw it, and it does not seem to have been posted online.
FURTHER UPDATE: See 2.57pm for more on this. Journalists were told about this at the end of August. But it was a bank holiday weekend, and many of us did not notice.
No 10 says government still committed to ensuring pensioners only just above tax threshold next year won’t pay income tax
The wage growth figures out today mean that the state pension is likely to rise by 3.9% next year. That is because, under the triple lock, the state pensions rises in line with earnings, prices or 2.5%, whichever is higher. Today’s figures are the ones for the earnings benchmark, and it is unlikely that the relevant inflation figure will be higher when it comes out. So next year the state pension should rise in line with earnings – by 3.9%.
As a result, pensioners should get an increase of £488 next year, taking the annual payment over £13,000. That means they will be above the £12,570 tax-free personal allowance.
Rachel Reeves anticipated this when she was chancellor and, in her budget last year, which confirmed a freeze in the personal allowance, she said that anyone who receives the state pension but no other income will not have to pay income tax before 2030.
In interviews this morning, Jonathan Reynolds, the business secretary, repeatedly refused to confirm that the government would commit to this promise. He just said it was a matter for the chancellor.
At the Downing Street lobby briefing this morning, No 10 said the Reeves promise still held.
The PM’s spokesperson said:
In line with the commitment made at the budget in 2025, pensioners who only just the personal allowance will not have the administrative burden of paying small amounts of tax in this parliament.
The chancellor will set out further details on how that commitment will be delivered at the budget shortly.
And work is already underway to ensure anyone whose only income is the full new or basic state pension, without any increments, will not pay income tax in this parliament. We’ll set out further details in due course.
The spokesperson did not say how the Treasury would decide if pensioners “only just” passed the income tax threshold.
Asked if this pledge would only apply to people relying entirely on the state pension, or whether it might include pensioners with a small private pension income, the spokesperson just said further details would be issued in due course.
DWP figures show claims for Pip disability benefit at record high
The number of people in England and Wales entitled to personal independence payments, known as Pip, has climbed to a record high, the Press Association reports. In its report on Department for Work and Pensions figures released today, PA says:
Pip is the main benefit paid to someone who has a long-term physical or mental health condition or disability, and is intended to help with everyday tasks and extra living costs.
The figures come ahead of the publication later this autumn of a government-commissioned review, led by Stephen Timms, into the costs and operation of the disability benefits system.
A total of 4.09 million people were entitled to claim Pip as of July 31 2026, according to data published today by DWP.
This is up from 3.83 million a year earlier – a rise of 262,045, or 7%.
The number of claimants has roughly doubled since comparable figures began in January 2019, when the total stood at 2.05 million.
Of the 4.09 million claimants, 3.4 million (83%) are of working age and 690,000 (17%) are state pension age.
People aged 50 and over account for more than half of those entitled to claim Pip, at 55% of the total, while 30-49 year-olds make up nearly 29% and 16-29 year-olds almost 17%.
Spending on Pip stood at £16.3 billion in 2019-20, when adjusted for inflation to today’s prices, and had increased to £27.3 billion by 2024-25, DWP figures show.
It is currently forecast to rise to £41.5 billion by 2030-31.
The DWP has said the Timms review will ensure Pip is “fit and fair for the future”.
Of the 4.09 million Pip claimants at the end of July, 1.60 million were listed as having psychiatric disorders, or 39% – the highest proportion for any type of disability.
Some 268,965 claimants were classed as having autistic spectrum disorders, more than three times the 79,395 in January 2019 when data began, according to Press Association analysis.
A further 442,666 claimants had mixed anxiety and depressive disorders, up from 171,833 in January 2019, while 106,087 had the hyperkinetic disorders ADHD or ADD, up from 23,741.
The second most common type of disability among claimants was general musculoskeletal diseases, which applied to 764,305 people in July this year, or 19% of the total.
Just over a third (35.8%) of new Pip claims in July were granted, while 61.4% were disallowed and 2.8% were withdrawn.
The grant rate for new claims has been on a downward trend for the past two years, having stood at 41.1% in July 2025 and 46.4% in July 2024.
This chart, from the DWP report, highlights the trend.
The chart implies there has been a sudden drop in claims recently.
But that is because it shows figures for claims for Pip and DLA, a seperate disability benefit. Pip is the new benefit replacing DLA and over time people are migrating from DLA to Pip.
The chart shows Pip figures going up to July 2026 (the dark blue and light blue lines). But the DLA figures only go up to March 2026.
Badenoch confirms Tories looking at ‘fiscally responsible’ ways of cutting inheritance tax
Kemi Badenoch has confirmed that the Conservatives are looking at “fiscally responsible” ways of cutting inheritance tax. In a post on social media yesterday, prompted by reports saying she will make an announcement about this at Tory conference, Badenoch said:
Reform says abolishing inheritance tax is “morally wrong”. I think it is morally wrong to punish people for doing the right thing – spending a lifetime working, saving, building up a business or a home to pass on to the next generation.
That’s why I’ve asked my team to explore fiscally responsible ways to do address this burden. The people caught by inheritance tax are mostly home-owning middle-class families due to house price inflation, diligent savers, and small-business owners.
The super-wealthy can afford trusts and sophisticated tax planning or move abroad.
In a report about this for the Financial Times, Lucy Fisher says:
The number of people paying IHT [inheritance tax] in the UK, which is applied to estates above a threshold of £325,000, has been increasing, mainly because of rising property prices, inflation and the threshold having been frozen since 2009. The total more than doubled to 30,400 between 2009-10 and 2023-24, according to HM Revenue & Customs data.
Labour has tightened the inheritance tax regime since coming to power in 2024, including by introducing plans to bring pensions within its scope from next April, a move that will see the number caught by the levy rise further.
In the first year after the changes are introduced, about 10,500 extra estates will have an IHT liability and roughly 38,500 estates will pay more IHT than before, according to government estimates.
Reducing or abolishing the levy would likely cost billions of pounds and come under fierce attack from the left as being a regressive and unfair move.
Robert Jenrick, the Reform UK Treasury spokesperson, has ruled out cutting inheritance tax. He argues that the Tory obsession with inheritance tax shows they are a party for the rich, and he says Reform UK’s decision to prioritise lifting the income tax threshold instead shows it is more interested in the needs of ordinary workers.
According to a story by Steven Swinford in the Times, Reform UK is already starting to spend some of the £72m it has been given – even though legislation going through parliament means some or all of it might have to be given back.
Swinford says:
Reform UK is already using the funding to expand its staff. It is doubling its policy team from ten to 20 staff as well as recruiting 400 field agents. Seventy job adverts are already live.
The party is also expected to announce a new online Reform UK TV channel, which will broadcast content over YouTube. It is investing significantly in the party’s media facilities at its headquarters on Millbank.
Some might argue that Reform UK does not need its own TV channel – because GB News does that job for the party already.
UK state pension set to top £13,000 a year as wage growth slows to 3.9%
Wage growth in the UK has slowed as workers come under pressure from a renewed cost of living squeeze fuelled by the Iran war, highlighting the challenge for the Bank of England as it prepares to set interest rates, Richard Partington reports. He says:
Data from the Office for National Statistics (ONS) shows average growth in total earnings, including bonuses, eased to 3.9% in the three months to July, down from 4.1% in the three months to June, matching the forecasts of City economists.
The figure is expected to dictate the rise in the state pension this year under the triple lock, where the benefit rises by either 2.5%, inflation, or average wage growth, whichever is highest, each year.
If the 3.9% number is used, that would push the annual state pension up by £488 from April to more than £13,000 a year.
The full story is here.
Today is the last day the Commons is sitting before the party conference recess. There are three urgent questions after 12.30pm, followed by a statement. They are (with rough timings):
After 12.30pm: A culture minister responds to a Tory UQ on the overnight visitor levy.
Around 1.15pm: An energy minister responds to a Lib Dem UQ on the implications of the closure of the Saudi East-West oil pipeline.
Around 2pm: An environment minister responds to a Lib Dem UQ on the English whisky geographical indication single malt definition.
Around 2.30pm: Yvette Cooper, the health secretary, gives a statement on the report from the Thirlwall inquiry into how Lucy Letby was able to kill babies at the Countess of Chester hospital. Yohannes Lowe is covering this story on a separate live blog that is already running.
