Healey expected to outline pension tax protection in Budget

Chancellor John Healey is expected to announce in the Budget on Wednesday, October 28, a tax allowance intended to protect low-income pensioners from income tax as the full new state pension rises above the current threshold. The full new state pension is projected to increase by 3.9% to about £13,036 a year from next April, an annual rise of £489. The personal allowance is currently £12,570 and has been frozen, meaning the full pension would otherwise exceed the tax-free threshold. The figures and proposed protection have been reported ahead of the Budget; final policy details have not yet been announced. The reported plan would set a higher personal allowance at £13,036 for pensioners on low incomes, with the allowance rising in line with the state pension during the current Parliament. The proposal is expected to benefit nearly one million people, according to reporting on the plan. Its precise eligibility rules remain unconfirmed. Reports indicate it may cover people whose only income is the state pension, while the treatment of pensioners with additional income is not settled. That distinction could affect people with small private pensions, additional state pension...