A former Conservative pensions minister has issued a stark warning that state pensioners could be hit with a £400 annual tax bill if Chancellor Rachel Reeves proceeds with expected changes in the upcoming Autumn Budget.
Pensioners Targeted in Tax Changes
Baroness Ros Altman, speaking ahead of the November 26 Budget, revealed that while working families would remain unaffected, pensioners would bear the brunt of potential tax reforms. This disproportionate impact arises because pensioners don't pay National Insurance after state pension age but remain liable for income tax.
According to Altman's analysis, someone with a retirement income of £35,000 per year would face an additional £400 in annual tax payments if the Chancellor alters current tax arrangements.
Multiple Threats to Older Households
The former minister identified another potential risk - a so-called 'mansion tax' that might target high-value properties. Altman cautioned that this could inadvertently affect older people living in ordinary family homes, particularly in London and the South East where property values have soared.
"Both these changes would hit older people hardest," Altman emphasised, pointing to additional dangers for less affluent pensioners. She highlighted how the combination of frozen tax bands and the rising Triple Lock mechanism could drag more pensioners into the tax net.
Political Battle Over Budget Plans
The warning has sparked political controversy, with Conservative leader Kemi Badenoch criticising the Chancellor's approach. "If she had a plan, she would be talking about what she was going to do other than tax rises," Badenoch stated. "All she's doing is blaming everyone else. This is a chancellor who's back against the wall. She doesn't know what she's doing."
However, Rachel Reeves defended her forthcoming budget, stating it would "focus squarely" on British priorities including the NHS, cost of living relief and reducing national debt. The Chancellor acknowledged the widespread speculation about her choices, saying: "I want people to understand the circumstances we are facing, the principles guiding my choices - and why I believe they will be the right choices for the country."
With the Autumn Statement scheduled for November 26, millions of state pensioners await confirmation of whether these tax changes will materialise, potentially adding hundreds of pounds to their annual financial obligations.
