State pension outrage as thousands of Britons demand Labour ‘stop payments being taxed’

A petition calling for the state pension to be exempt from income tax has gained significant traction, with over 81,000 signatures so far. The campaign, launched by Dennis Reed on behalf of the charity Silver Voices, aims to pressure the Labour government to change tax allowance rules and prevent older Britons from being taxed on their state pensions. The petition comes as concerns grow that the state pension will soon exceed the personal tax allowance threshold, potentially forcing pensioners to pay income tax on their retirement income alone.

The full state pension is set to increase to £11,973 next month, just below the current personal tax allowance of £12,570. However, with tax thresholds frozen until April 2028, the state pension is expected to surpass the tax threshold by April 2027, reaching approximately £12,578 per year. This means pensioners could face a tax bill of just £1.60 on £8 of income, but the principle of taxing the state pension has sparked outrage.

The petition highlights the growing tax burden on older Britons, many of whom are being pulled into higher tax brackets for the first time due to frozen thresholds and small private pensions. One example is Colette, a 75-year-old widow, who receives a portion of her late husband’s state pension alongside her own, pushing her over the tax threshold. Even her modest NHS pension of £37 a month is being taxed, further straining her finances.

Dennis Reed of Silver Voices warned that taxing the state pension undermines its purpose as a safety net for retirees. He argued that if Triple Lock increases are also taxed, the safeguard designed to protect pensioners from rising living costs would be rendered ineffective. Former pensions minister Sir Steve Webb also criticized the situation, calling it “nonsensical” that people relying solely on the state pension could soon be dragged into the tax system.

The petition has already surpassed the 10,000 signatures needed to trigger a government response. If it reaches 100,000 signatures, Parliament will consider debating the issue. Silver Voices is aiming for 150,000 signatures to strengthen its case. The charity is calling on Chancellor Rachel Reeves to increase the tax threshold for state pensioners by at least £1,000 in her upcoming Spring Statement and to align future threshold increases with Triple Lock rises.

The campaign reflects broader concerns about the financial pressures facing older Britons, particularly as frozen tax thresholds and rising living costs erode their incomes. As the state pension continues to grow, the issue of taxing retirement income is likely to remain a contentious topic, with many arguing that the state pension should remain a tax-free benefit to ensure dignity and security in retirement.