Why Pensioners have to pay income tax now

The 2024 budget has stated the the triple lock system will be secured which allows the state pension to increase in line with inflation so that pensioners are able to afford the rising cost of living. This rise has now set the state pension to, £11,502 from now.

The tax threshold is remaining steady at £12,570, so those who only receive the state pension will have no changes. Those who receive this as well as an additional private pension of £1,068 or more will be pushed into the tax bracket and have to start paying income tax.

Pensioners worry for their finances

Clarke and Peacock estimate that around 650,000 pensioners will now have to pay income tax.

The financial worries for pensioners now increase with the added tax and being able to afford the cost of living is already difficult on their low incomes.

Many worry about what they will have to do for this new rule. HMRC have stated that there will be no need for self-assessments as this is an automatic payment. However, the likelihood of incorrect tax codes means that claiming back overpayments will make contacting HMRC a necessity. This is a frustrating and worrying time for pensioners as they have to navigate their new finances.