What happened: Chancellor Rachel Reeves confirmed that individuals receiving income solely from the new state pension will not pay tax on it. The new state pension is set to rise to £241.30 per week from April, just below the personal tax allowance.
Why it matters:
- Creates a potential two-tier system between retirees relying only on state pension and those with private pensions.
- Affects pensioners whose income is solely from the state pension, potentially reducing their tax burden.
MNN Take: This clarification means pensioners on the new state pension alone will likely avoid income tax, while those with additional private income may still face taxation.
Sources: Guardian UK