Chancellor Rachel Reeves has said there will be no tax increases for now, but experts are warning that pensioners might still be affected. Some believe Reeves could bring in new pension taxes before the Autumn Budget because the economy is still weak.
In the Spring Statement, Reeves promised not to raise tax rates and said she would stick to her financial rules. But the Office for Budget Responsibility (OBR) expects the UK economy to grow more slowly next year, dropping to just 1%. This is a challenge for Reeves, who has made economic growth one of her main goals. Although growth may improve later, other risks—like Donald Trump possibly placing tariffs on UK goods—could cancel out any financial progress.
Economists say Reeves might have no choice but to raise taxes in the Autumn to keep government finances balanced. Paul Johnson from the Institute for Fiscal Studies said if the economy gets worse, the government may have to look at options like taxing pensions, increasing taxes on the wealthy, or raising capital gains tax.
Some pensioners are already affected by what experts call a “stealth tax.” This happens when tax-free income limits stay the same while pensions and incomes rise, pushing more older people into paying tax. Even the full state pension could soon be taxed if it goes over the personal allowance.
Reeves didn’t mention pensions in her Spring Statement, but experts believe changes could still come later in the year. Johnson said the Spring Statement was more of a pause, and the real decisions will be made in the June Spending Review and the Autumn Budget.
He warned that if the economy performs worse than expected, Reeves may have to act quickly. That could mean months of uncertainty as people try to guess what tax changes might come next. The Autumn Budget is expected in late October or early November, but no exact date has been announced.
