Andy Burnham has confirmed an exemption for state pensioners on their tax bills, following a promise from Labour Party Chancellor Rachel Reeves. Ms Reeves has confirmed that state pensioners who do not have any other income will not be made to pay tax on their state pension payments next year.
Background of the Pledge
Ms Reeves' pledge, made before Christmas, came amid fears that state pensioners relying solely on the Department for Work and Pensions (DWP) income would lose some of their pension payments to tax from April 2027. From that date, the triple lock is forecast to take the full new state pension above the annual £12,570 Personal Allowance threshold for the first time.
Burnham's Commitment
Mr Burnham has committed to honouring Ms Reeves' promise during an interview with the I paper, ahead of becoming Prime Minister in mid-July. He stated that he would ensure the exemption remains in place for pensioners with no other income.
Official Statements
Ms Reeves told Parliament: “People only in receipt of the basic or new state pension do not have to pay small amounts of tax through simple assessment from April 2027.” She also informed Martin Lewis, the BBC and ITV star and Money Saving Expert founder, back in November: “In this Parliament they won’t have to pay the tax. Further on, I’m not able to make any commitments on that. We are looking at a simple workaround at the moment.”
After Ms Reeves' confirmation, HM Treasury issued a statement. HMRC, the tax arm of the Labour government, confirmed: “Anyone whose only income is the full new or basic state pension without any increments will not pay income tax and we are committed to that over this Parliament. By keeping the triple lock, 12 million pensioners will see their income rise by up to £470 this year, and they continue to benefit from the highest Personal Allowance in the G7.”
