{"id":103633,"date":"2025-02-07T09:50:00","date_gmt":"2025-02-07T09:50:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=103633"},"modified":"2025-02-07T08:48:06","modified_gmt":"2025-02-07T08:48:06","slug":"rachel-reeves-tax-plan-pensioners-income-tax","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/rachel-reeves-tax-plan-pensioners-income-tax\/","title":{"rendered":"Rachel Reeves\u2019 Tax Plan Could Push More Pensioners Into Paying Income Tax"},"content":{"rendered":"\n

The UK Government is facing growing pressure to increase the personal tax allowance under Rachel Reeves’ tax plan<\/strong>, as a new petition calls for a rise from \u00a312,570 to \u00a320,000<\/strong>. The proposal aims to help low-income individuals<\/strong> and pensioners retain more of their income, amid concerns that many retirees will be pushed into paying tax under Rachel Reeves’ fiscal policies<\/strong>.<\/p>\n\n\n\n

Petition Calls for a Higher Personal Allowance<\/h2>\n\n\n\n

An online petition, launched by Alan David Frost<\/a>, argues that it is unfair for pensioners to be taxed on their State Pension<\/strong> when it exceeds the personal allowance threshold. The petition states that increasing the allowance would enable low earners to move off benefits<\/strong> while allowing pensioners to retain more of their income.<\/p>\n\n\n\n

Since its launch, the petition has gathered 12,000 signatures<\/strong>, prompting a mandatory government response<\/strong>. If it reaches 100,000 signatures<\/strong>, it could be considered for debate in Parliament<\/strong>.<\/p>\n\n\n\n

Current Tax Thresholds and Their Impact on Pensioners<\/h2>\n\n\n\n

Under existing policies, the Personal Allowance<\/a><\/strong> will remain at \u00a312,570<\/strong> until at least 2028\/29<\/strong>. The full New State Pension<\/strong> for 2024\/25<\/strong> is set at \u00a311,502<\/strong>, increasing to \u00a311,973<\/strong> in 2025\/26<\/strong>. This leaves pensioners with a narrow margin before exceeding the tax threshold\u2014\u00a31,068 in 2024\/25<\/strong>, shrinking to \u00a3597 in 2025\/26<\/strong>.<\/p>\n\n\n\n

For those whose only income is the State Pension<\/strong>, no tax will be due. However, additional income<\/strong> from employment, private pensions, or workplace pensions may push many pensioners above the personal allowance threshold<\/strong>, requiring them to pay income tax<\/strong>.<\/p>\n\n\n\n

Here\u2019s how pensioners might be affected:<\/p>\n\n\n\n