State pensioners face ‘poverty’ unless Rachel Reeves changes HMRC rule next week

State pensioners, who are born before 1959, could face poverty due to tax thresholds, campaigners have warned.

State pensioners, who are born before 1959, could face poverty due to tax thresholds, campaigners have warned.

State pensioners face POVERTY unless the Labour Party Chancellor Rachel Reeves changes a rule next week, it has been warned. State pensioners, who are born before 1959, could face poverty due to tax thresholds, campaigners have warned.

The Labour Party Chancellor Ms Reeves will deliver her Spring Statement on March 26 – next week. And ahead of the landmark address, a campaigner says older Britons could be ‘plunged into poverty’ if the tax threshold for state pensioners is not raised.

Dennis Reed, who has often lobbied the government, said: “Many more pensioners across the country would be plunged into poverty as a result of political choice.”

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His comments came after he launched a Change.org petition to increase the tax threshold for state pensioners by at least £1,000. The petition has been signed by almost 80,000 people.

Reed said he was concerned “the frozen tax personal allowances, the top of the new state pension may breach the current personal allowance of £12,570 in 2026.” He said: “This 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.”

Mr Reed added that failure to increase the tax threshold would be a “double whammy” on older people already suffering from rising fuel bills. Mr Reed was chatting to FT Adviser when he made the calls this week, putting Ms Reeves under pressure.

Mr Reed warned that countless other pensioners could begin to see their pension taxed from early next year with frozen tax personal allowances meaning that many might cross the current personal allowance of £12,570 in 2026.

He added: “If the basic state pension starts being taxed it undermines the whole principle of a safety net in retirement to ensure that the basic necessities in life can be afforded. And if Triple Lock increases each year are also taxed then that safeguard, to protect against sudden increases in the cost of living, is also undermined.”

The tax-free personal allowance has been frozen at £12,570 until 2028, but the new state pension is due to increase to £11,973 next month.

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