Healey is expected to shield low-income pensioners from income tax – but how will it work?
Source: The Guardian ·
Retirees will get a personal allowance aligned with the new state pension, but experts say it could get complicatedRetirees in the UK on low incomes are expected to be given a new personal allowance so that they do not have to hand any of their state pension to HMRC.The full details are due to be revealed by the chancellor, John Healey, in Wednesday’s budget, but here is what we know so far.…
From the source
Retirees in the UK on low incomes are expected to be given a new personal allowance so that they do not have to hand any of their state pension to HMRC. The full details are due to be revealed by the chancellor, John Healey, in Wednesday’s budget, but here is what we know so far. New state pension is set to overtake personal allowance The state pension rises each April. There are two different pensions , the basic state pension which is received by older retirees and the new state pension which is received by anyone who has retired since 6 April 2016. How much the new state pension goes up by is determined by the triple lock , which promises that it will be the highest of inflation, wage growth or 2.5%. This year, the highest of the three has been wage growth, which for the relevant month was 3.9%. As a result, from April 2027 the full state pension will be worth £13,036 a year. Thanks to a freeze in the personal allowance that applies to everyone, the amount anyone can earn before…