8.51 Million UK Pensioners Hit with “Stealth Tax” as 1.66 Million More Pay Income Tax on State Pensions!

Rising Tax Burden on Pensioners: Government Policy and Financial Impact

Chancellor’s Policies Under Fire: Criticism Grows Over “Stealth Tax” Impact on Pension Incomes

According to GBN News, recent data shows a notable increase in pensioners paying income tax on their state pensions raising concerns about finances and government policies. HM Revenue and Customs reports a rise from 7.85 million to 8.51 million pensioners paying taxes largely due to the government’s decision to freeze tax allowances until 2028. This freeze termed fiscal drag means that as pensioners’ incomes grow from yearly state pension increases their tax thresholds stay static causing them to enter higher tax brackets.

Criticism of Chancellor Jeremy Hunt’s policies has grown, with many labeling them a stealth tax that reduces pensioners’ incomes. Despite promises from the triple lock system that state pensions will rise annually by the highest of inflation average earnings growth or 2.5%, pensioners are more often having to pay taxes on their fixed incomes. This has sparked concerns about financial difficulties for older Britons, particularly those with limited retirement savings who are now dealing with unforeseen tax obligations.

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8.51 Million UK Pensioners Hit with “Stealth Tax” as 1.66 Million More Pay Income Tax on State Pensions! (PHOTO: GB News)

Growing Concerns: Calls for Reforms Amid Rising Tax Liability for Pensioners

Tax expert Tom Minnikin highlighted the inevitable trend of more pensioners falling into the tax net due to these policy decisions. He pointed out the impact of frozen income tax thresholds compared to rising pension incomes, stressing that even those receiving the full state pension could soon be liable for income tax. As pensioners rely more on continued employment to supplement their incomes, the effects of these tax policies on retirement finances continue to be concerning. This has prompted calls for a review and potential reforms to ease the burden on elderly taxpayers.

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