Pensioners: Taxation

Treasury written question – answered on 15th May 2020.

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Photo of Nicholas Fletcher Nicholas Fletcher Conservative, Don Valley

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that pensioners who are negatively affected by the marginal rate of income tax do not lose out during the covid-19 outbreak.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government is committed to ensuring that older people are able to live with the dignity and respect they deserve, and the State Pension is the foundation of state support for older people. The Government provides support for older people, such as Winter Fuel Payments, free eye tests and NHS prescriptions, and free bus passes.

Since 2010, the State Pension has been uprated by the highest of average earnings growth, price inflation or 2.5% - an approach known as the Triple Lock. The value of the State Pension is £1,903.20 a year higher than it was in 2010.

It is important to note that the personal allowance - the amount of income that each individual may receive before paying income tax - is currently set at a level high enough to ensure that those pensioners whose sole income is the new State Pension or basic State Pension do not pay any income tax.

The Government is committed to a fair tax system in which those with the most contribute the most. This is why the income tax system consists of three progressive rates of tax, which sit above an internationally high personal allowance.

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