New calls to help older people keep more of their ‘well-deserved money’ by increasing Personal Allowance
14.05.2024 - 10:05
/ dailyrecord.co.uk
A Conservative MP has urged the Department for Work and Pensions (DWP) to “encourage the Chancellor to look again at the Personal Allowance and allow more pensioners to keep more of their well-deserved money”. During DWP questions in Parliament on Monday, Alexander Stafford highlighted how older people “should be able to retire in comfort and dignity” and are benefiting from the State Pension Triple lock increase of 8.5 per cent over the 2024/25 financial year and 10.1 per cent last year.
However, the Rother Valley MP added: “Many of my constituents are concerned about being taxed on those pensions, as the Personal Allowance has, in effect, been frozen for nearly five years. Will the Minister encourage the Chancellor to look again at the personal allowance and allow more pensioners to keep more of their well-deserved money?”
The Personal Allowance has been frozen at £12,570 since the 2021/22 financial year. Pensions Minister Paul Maynard replied: “It is absolutely clear that those who rely solely on the State Pension are not liable for income tax.”
Due to the annual State Pension uprating, more people in retirement with additional income are expected to be tipped over the tax threshold. Financial experts from Spencer Churchill estimate that up to 900,000 retirees may be facing an unexpected tax bill at the end of the current financial year.
The full New State Pension is now worth £221.20 each week and as payments are typically made every four weeks, this amounts to £884.80 each pay period. Over the 2024/25 financial year, this is an increase of £902, taking the annual income from State Pension alone from £10,600 to £11,502.
This leaves just £1,068 before the personal tax threshold is exceeded, so anyone with additional
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