Almost a million pensioners will discover this week that their 8.5% increase in the State Pension, payable from 8 April, will push their pension over the basic income tax threshold of £12,570, which has been frozen since April 2021, and due to stay frozen until April 2028.
The National Pensioners` Convention (NPC), representing over a million pensioners through its affiliated organisations, unanimously endorsed a CSPA policy motion at its recent biennial delegate conference to actively campaign for the basic income tax threshold to be raised in line with inflation and then index-linked to the CPI.
CSPA Deputy General Secretary David Luxton told delegates at the conference in Staffordshire that “fiscal drag” had dragged almost a million more pensioners into paying income tax this year, and now 9.1million over 65`s were paying income tax, compared to 4.5 million in 2010. He urged the NPC to stop this stealth tax on pensioners and others on low fixed incomes, and ensure that the thresholds were uprated each year in line with inflation.
Delegates were also told that pensioners on an average £10,000 public service pension will lose £436 of their total pension increase this year in tax, due to the threshold freeze, which should have been at £14,300 from April had it increased in line with inflation.
CSPA has been campaigning for the tax thresholds to be increased and General Secretary Sally Tsoukaris was quoted in the Sunday Express this week highlighting the impact of the freeze on pensioners: . “Nearly 10 million pensioners are predicted to be paying income tax within the next few years. That’s not what income tax was designed for and it’s going to hurt the very people in later life who society should look to shield from money worries.”
