Income Tax: Retirement
The question
To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential impact that changes to Income Tax rules for retirees will have on pensioners in receipt of the basic State Pension with an Additional State Pension (SERPS) or State Second Pension.
Answered by Torsten Bell
The Government is committed to making sure older people can live with the dignity and respect they deserve in retirement. The State Pension is the foundation of the support available to them.
Over the course of this Parliament, the yearly amount of the full new State Pension is currently projected to go up by around £2,100. This will increase the basic and new State Pension by 4.8% next April, boosting pensioner incomes by up to £575 a year and strengthening retirement security.
The State Pension has always been taxable, but this year the headline rates of the basic and new State Pension will remain below the income tax personal allowance.
In addition the Government has announced that it will ease the administrative burden for pensioners so that they do not have to pay small amounts of tax via Simple Assessment from 2027/28. The Government will set out more details in due course.
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