A petition calling for the government to lower the personal tax threshold for pensioners has reached over 120,000 signatures – but the government is refusing to meet with its authors.
Over 60s campaign group Silver Voices say the Department for Work and Pensions (DWP) is “refusing to meet” them to discuss the hundreds of thousands of people set to pay tax on their state pensions.
Silver Voices, has called on chancellor Rachel Reeves to raise the tax threshold for state pensioners by at least £1,000 in her Spring Statement on 26 March, in a petition signed by 123,000 people so far.
An ongoing freeze on tax personal allowances, along with an imminent increase in the state pension due to the government’s “triple lock”, means many older people will face paying tax on their state pension for the first time.
Another 650,000 pensioners will now be liable to pay tax on their pensions this financial year because their earnings now exceed the personal allowance tax threshold, which has sat at £12,570 since 2021.
A ‘double whammy’ for vulnerable people
Senior citizens group Silver Voices says the issue, combined with the winter fuel allowance being taken away from many pensioners, has served a “double whammy” for many vulnerable people, who now face a lower quality of life in their retirement years.
Silver Voices says it has tried to speak to ministers about the issue, but claims the government has so far not been willing to listen.
“They’re refusing to meet us. I’ve asked on a number of occasions either to meet the Secretary of State for Work and Pensions Liz Kendall or her ministers to talk about this and other related issues, and they refuse,” the group’s director Dennis Reed tells Yahoo News.
“They say their diaries are too busy. So, all we can do is to continue to protest and hope that they will see reason.
“If we were engaged in civilised discussion with the government to talk about all the challenges facing older people in the UK, then there wouldn’t be any need for us to be doing these petitions.”
A rise in state pension means the upper portion of pensioner’s income may breach the current personal allowance of £12,570 in 2026, Silver Voices says.
This, the group warns, would “lead to the ludicrous situation of the state pension safety net, which has already been paid for through national insurance and tax, being taxed again”.
“Many more pensioners across the country would be plunged into poverty as a result of political choice,” it adds.
Colette Rogers, 75, lives off the state pension, her small NHS pension of about £37 a month, and a proportion of her late husband’s pension, to which she is legally entitled. This combined has put her over the personal allowance threshold.
The retired GP practice nurse, from Dorset, lost her winter fuel payment this winter and found for the first time this year that her combined income is now being taxed.
“She’s lost out on both counts, and when you’re on a modest income it really does matter,” says Reed “Both her and her husband paid taxes, that’s her entitlement, and she’s actually being taxed on that.”
Silver Voices says Rogers’ story is just one example of the “hundreds of thousands” of pensioners facing a significant hit on their budgets unless the government steps in to help them.
Reed told Yahoo News that Rogers is now worried that she “won’t be able to go out to meet friends” due to the extra squeeze on her budget, warning that “loneliness is not only horrible, it also affects people’s mental and physical health”.
Why is this happening?
The personal allowance tax threshold (the amount of income you don’t have to pay tax on) has been frozen at £12,570 since April 2021.
The current government has frozen the allowance at this figure until 2028, which is expected to bring in £29.3bn during that financial year.
Rising wages since then have pushed more lower earners over this tax barrier, with the same now expected to happen to many state pensioners.
This is because of something successive governments have touted as the “triple lock” on pensions – a guarantee that the state pension will rise each year by whichever is higher, CPI inflation, average wages, or 2.5%.
“The government talks a lot about the triple lock and about how the triple lock is so wonderful for older people,” says Reed. “But in fact, if you’re over that tax threshold, you get 20% less on your triple lock increase because you’re being taxed on it.”
Reed says that in an ideal world, he would like to see the threshold raised by even more than £1,000, but says Silver Voices are “trying to be realistic” in the face of the Treasury’s budget constraints.
“There always used to be age-related tax allowances, which were abolished in 2016,” he adds.
“There’s no reason why there couldn’t be an age-related personal allowance. It was done before so it can be done now, and that’s what we that’s what we’re calling for.”
An HM Treasury spokesperson said: “The state pension is the foundation for ensuring pensioners are able to live with the dignity and respect they deserve. We are committed to the triple lock which is due to rise by 4.1% this year.”
The DWP said: “The state pension is the foundation for ensuring pensioners are able to live with the dignity and respect they deserve.
“We are committed to the triple lock which means millions of pensioners will see their State Pension rise by up to £1,900 over the course of this parliament.”
