Income Tax is liable on income, including private pensions and the State Pension, if they exceed the personal allowance. I appreciate the frustration of armed forces pensioners on this issue, the previous Conservative-led Government introduced the biggest ever rise in tax-free earnings, cutting income tax for over 27 million people and taking 3.8 million people out of tax altogether.
I am pleased the personal allowance will rise again next April to £11,000, with the higher rate threshold also rising to £43,000 – as over the parliament we raise the personal allowance to £12,500, and increase the 40p threshold to £50,000.
In addition to this, steps have been taken to support pensioners, guaranteeing the value of the state pension with a new triple lock which ensures that the basic State Pension rises by the higher of earnings, prices or 2.5 per cent. As a result of this, the biggest ever increase in the state pension has been delivered, and the basic state pension is £950 higher than it was in 2010.
By Patrick McLoughlin on October 27, 2015