One million more pensioners to pay income tax in shock stealth grab'

"Up to a million more pensioners will be drawn into paying income tax as a direct consequence of frozen tax thresholds, according to new forecasts from the budget watchdog. The Office for Budget Responsibility's (OBR) forecast, published for chancellor Rachel Reeves' spring statement on Tuesday, indicated that 600,000 more pensioners than previously estimated will face income tax by 2026-27. That figure is due to escalate to one million by 2030-31."

"While the state pension is subject to income tax, individuals whose sole income derives from it have historically avoided payments. This is because the full state pension, currently 230.25 per week, falls below the annual personal tax allowance of 12,570. In her November 2025 budget, Ms Reeves extended a freeze on the personal allowance until 2031."

The Office for Budget Responsibility forecasts that frozen tax thresholds will significantly increase the number of pensioners paying income tax. By 2026-27, an additional 600,000 pensioners beyond previous estimates will face income tax obligations, escalating to one million by 2030-31. Historically, pensioners whose sole income came from the state pension avoided tax because the full state pension of £230.25 weekly fell below the personal allowance of £12,570. Chancellor Rachel Reeves extended the freeze on personal allowance until 2031. Under the triple-lock policy, the full new state pension will exceed the personal allowance for the first time in 2027-28, triggering tax liability for more pensioners.

Read at www.independent.co.uk