Earnings figures released by the Office for National Statistics on Tuesday indicate that the state pension could leap by 8.5 next April.
Pensioners could be set for a bumper state pension increase next April, but many more could be dragged into paying tax, experts have said
This could take the average weekly new state pension from £203.85 to £221.20, or from around £10,600.20 to £11,502.40 on an annual basis. As well as being higher than 2.5%, the earnings measure is also expected to be higher than September’s Consumer Prices Index inflation measure, which is the other element of the triple lock.
“Alongside a continued freeze of the tax-free personal allowance, this is likely to drag well over half a million more pensioners into the income tax net. Once again, ‘stealth’ taxation proves a convenient revenue-raiser for the Chancellor. With the personal tax threshold due to be frozen again at £12,570 next year, a large pension rise, coming on top of last year’s 10.1% rise, could drag many more pensioners into paying income tax.
Jason Hollands, managing director at wealth management firm Evelyn Partners, said: “Anyone with even a very modest private income will be tipped into paying basic rate tax at 20%, with some estimates expecting half a million more pensioners to become taxpayers in the next tax year.
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