15 September 2024 , 06:07
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The warning has come as hundreds of thousands of pensioners across the country could be at risk of receiving a bill from the government tax department next year
A warning has been issued to hundreds of thousands of pensioners across the country to expect an HMRC bill for the first time.
340,000 pensioners are at risk of a bill coming through the door from the government tax department as the Triple Lock brings a £460 hike. Around 240,000 people could face crossing the personal allowance threshold of £12,570 next year and starting having to pay tax on their income according to former pensions minister Steve Webb, the ex-Liberal Democrats pensions minister.
An uplift in the Triple Lock next April - worth £460 - will take people closer to the allowance. If the state pension is worth £11,962.60, it leaves people with £1,600 in savings facing a bill, BirminghamLive reports. Sir Steve said: "From next year, roughly three in four UK pensioners will have to pay income tax, and just over a third of a million will be dragged into the tax net for the first time since they retired."
Victoria Harris, co-founder of The Curve Platform, said: "The potential revision of the earnings figure for the triple lock is a hot topic. While it’s too early to pin down an exact number, we could be looking at an increase of around 7 to 8 per cent based on current projections.
"This would be a significant boost for pensioners." She explained: "We must consider the broader economic implications. Inflation is the wild card here. If it continues to rise in the coming months, we might see even higher pension increases.
"This could be a double-edged sword - great for pensioners in the short term, but potentially challenging for the economy as a whole." Yiannis Zourmpanos, financial consultant and senior contributor at Bountii, said: "The Office for National Statistics (ONS) often revises its earnings data, which means the state pension increase you’re expecting might not be the one you’ll get.
"The ONS has been known to provide updated figures that more accurately reflect the actual earnings growth over a given period. This means that by the time the final calculations are made, we could see a different percentage being used for the state pension uprating."