Healey to shield low-income pensioners from income tax in the Budget
Chancellor John Healey plans to shield low-income pensioners from income tax in the upcoming Budget by introducing a new tax allowance. This move aims to prevent the state pension increase from pushing pensioners into the tax bracket.
Why it matters
The policy addresses cost-of-living concerns for the elderly and reflects the government's fiscal priorities ahead of the Budget announcement.
Image source, Getty Images By Joe Pike , Political correspondent and Richard Wheeler , Political reporter Published 28 minutes ago Pensioners on low incomes will be shielded from income tax by Chancellor John Healey in his first Budget on Wednesday.
The full, flat-rate state pension is expected to increase by 3.9% to £13,036.40 a year from April. This would take the payment above the £12,570 personal tax allowance and therefore be liable for income tax if no changes are made.
The government had already committed to not taxing people who only get an income from the state pension. Healey will explain this pledge will be met by plans for a new tax allowance for low-income pensioners.
Healey's plans come as the Conservatives and Reform UK unveil their alternative Budget proposals, including deep cuts to the welfare bill.
What is the Budget and what could be in it?
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