Shimeon Lee, policy analyst at the TaxPayers’ Alliance, told GB News that elderly Britons are facing a “nasty surprise”.
A finance expert has warned over a “nasty surprise tax”‘ that pensioners will be “dragged” into paying. Shimeon Lee, policy analyst at the TaxPayers’ Alliance, told GB News that elderly Britons are facing a “nasty surprise”.
Lee warned state pensioners will be clobbered thanks to frozen tax thresholds – and a rise in Department for Work and Pensions ( DWP ) payments thanks to the Triple Lock.
Lee told GB News: “Those with incomes under the personal allowance, which is about £12,500, generally do not pay tax on their income. But because of these frozen tax thresholds, which have been frozen since 2021, more and more people are being dragged into paying tax. That includes more people being pulled into paying the higher rate of income tax.
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“A lot of pensioners are also now being dragged into paying tax at all, simply because their state pension rises each year due to the triple lock. The threshold stays the same, but the pension goes up, meaning more and more pensioners are crossing the tax threshold.”
He added: “Frozen tax thresholds affect the poorest people in the country the most, and they can be a really nasty surprise for those who did not expect to be paying tax and who are already struggling to make ends meet.
“Now, the personal allowance, if it had risen with inflation, should be around £15,500. That’s a huge difference. It means people are paying tax on an additional £3,000 of income.
“If you take the income tax rate of about 20 percent, plus National Insurance of around 8 per cent, that gives you a tax rate of roughly 28 per cent.”
GB News host Martin Daubney said: “There’s the winter fuel allowance grab. A lot of pensioners are still absolutely reeling from losing £300.
“That’s over a grand’s worth of extra tax revenue taken from people who simply paid into the system their entire lives.
“It’s going to start an entire conversation once again about pensioners, politically, feeling like a punching bag, like a cash cow that can just be milked dry.”
