A leading campaign group for older people is demanding urgent changes to the tax system to protect retirees on the state pension from unexpected bills.
Call for a New Tax Band for Pensioners
Dennis Reed, director of the Silver Voices campaign group, has called on HM Revenue and Customs (HMRC) to create a new, higher tax-free allowance specifically for retirees. The proposal would see the Personal Tax Free Allowance increased by £1,000 for everyone aged 66 and over who claims the Department for Work and Pensions (DWP) state pension. This would effectively establish a new tax band of £13,570 for this group.
Reed has described the current situation as a "grossly unfair anomaly" and warned that many older people now face surprise tax demands. He directly linked the issue to Chancellor Rachel Reeves's recent Budget, stating: "Rachel Reeves has opened a Pandora’s Box of problems with her last-minute Budget concession."
The 'Only Fair Solution' to a Growing Problem
Silver Voices argues that the simplest and most equitable fix is to unfreeze the lower tax threshold for all pensioners. Raising the tax-free allowance by £1,000 would, according to the group, shield those on low incomes from being dragged into the tax net.
This view is supported by Sandra Wrench, a 74-year-old from Bedford and former DWP worker. She told the I newspaper: "If the Government raised the threshold by £1,000, it could save a lot of headaches for pensioners, and save a lot of headaches for the DWP in working out who has to pay tax."
Deferring State Pension: A Personal Perspective
Ms. Wrench also shared her own experience of deferring her state pension to continue working part-time into her sixties, despite health issues. "It worked well for me because it helped me boost my income in retirement. It has made things a bit more comfortable," she said.
However, she acknowledged this is not an option for everyone, stating: "I was lucky, exceptionally lucky, that I could defer for so long. Many people won’t be able to do it for too many years, if they have health issues." She added that while the deferment rate is less favourable now, it could still benefit some.
The calls from Silver Voices come as a growing number of pensioners receive tax bills, highlighting a pressing financial pressure on older households across the UK. The campaign group has vowed to continue pushing for what it sees as a vital change to ensure tax fairness for retirees.
