More than 7,330 people have signed an online petition calling on the UK Government to “introduce a Bill to remove income tax on the State Pension”. Ray Crawford argues people like himself are “penalised by the UK Government and HM Revenue and Customs (HMRC) by paying income tax on our State Pension because we have either workplace or private pension schemes to support us in later life”.
Basic and New State Pension payments increased in April by 10.1 per cent as part of the annual benefits uprating. People on the full New State Pension now receive £203.85 each week and those on the full Basic State Pension get £156.20.
However, while the increase will undoubtedly help offset the ongoing cost of living crisis, it also means more older people may have to pay tax on their income. This is because someone with 35 years’ worth of NI contributions, on the Full New State Pension will receive £815.40 every four-week pay period, giving them an annual income of £10,600.20 - which leaves them just £1,969.80 of their annual Personal Allowance of £12,570.
