The Liberal Democrats have warned that over one million pensioners will be dragged into paying income tax amid the Tories stealth tax freeze by 2027-28.
When the stealth tax freeze ends in 2027-28 the tax threshold will rise to £15,990 and the personal allowance threshold was frozen in April 2021 at the £12,570 level.
By 2024-25 an estimated 1.2 million pensioners will be forced to pay income tax and by 2027-28 an additional 1.6 million pensioners will be paying income tax, according to analysis from the House of Commons library.
Liberal Democrat Treasury spokesperson Sarah Olney said: “These stark figures reveal the stealth tax bombshell facing pensioners under this Conservative government.
“Older people who have worked hard and contributed all their lives are now being clobbered with years of unfair tax hikes.
“Jeremy Hunt’s pensioner-punishing Budget will not be forgotten come the next election. The Conservative Party faces a reckoning at the ballot from older voters sick of being taken for granted.”
Baroness Altmann, a former Tory pensions minister, told the Telegraph: “I do think it is worrying that so many more pensioners could be dragged into the tax net as the state pension may soon rise above the frozen threshold.
“Most of those tipped into tax will be poorer pensioners with little more than their state pension to live on. Most of them will be unaware of any liability and never have filled in a tax return in their life.
“They are then at risk of being hit with fines and penalties for not paying a tiny amount of tax they didn’t even know about.”
A Treasury spokesman defended and told the Telegraph, “After providing hundreds of billions of pounds to protect lives and livelihoods throughout the pandemic and Putin’s energy shock, we had to take some difficult decisions to help pay it back.
“Now the economy is turning a corner, we have cut National Insurance by a third, meaning that, coupled with above-inflation increases to personal tax thresholds since 2010, we have saved the average earner over £1,500 compared to what they otherwise would have paid.”
