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  "path": "/money/state-pensiontax-unfair-hmrc",
  "publishedAt": "2026-06-01T17:50:00.000Z",
  "site": "https://www.gbnews.com",
  "tags": [
    "HMRC explains how state pension tax works as retirees face confusion",
    "DWP warning: 1.4 million state pensioners risk seeing payments stopped or reduced",
    "State pension scandal as Labour MPs back Tony Blair's call to scrap triple lock",
    "The GB News Editorial Charter"
  ],
  "textContent": "\n\n\nA leading union is slamming an unfair HM Revenue and Customs (HMRC) charge as millions of UK pensioners are being swept into the income tax system.\n\nThanks to the phenomenon known as \"fiscal drag,\" the personal tax allowance has sat frozen at £12,570 since 2021, yet pensions and wages have climbed in line with inflation over the same period.\n\n###\n\n\n\n\nThe personal allowance has sat frozen at £12,570 since 2021, yet pensions and wages have climbed in line with inflation over the same period.\n\nThis widening gap means growing numbers of retirees now face tax bills for the first time, even though their actual purchasing power has barely improved.\n\n###\n\n\n\n\n###\n\n\n\n\nThe Civil Service Pensioners' Alliance warns that frozen thresholds are having an increasingly severe effect on older people living on fixed incomes.\n\nInstitute for Fiscal Studies (IFS) data reveals the scale of this shift. In 2021-22, approximately 6.7 million pensioners were paying income tax.\n\nBy 2025-26, that figure has swelled to roughly 8.8 million. Should thresholds remain static, forecasts indicate some 9.3 million pensioners—representing around three quarters of all retirees—could find themselves liable for income tax by 2030.\n\nThis would mean older Britons whose sole income comes from the state pension will become taxpayers for the first time on their payments alone.\n\n###\n\n\n\n\n### LATEST DEVELOPMENTS\n\n\n\n\n  * HMRC explains how state pension tax works as retirees face confusion\n  * DWP warning: 1.4 million state pensioners risk seeing payments stopped or reduced\n  * State pension scandal as Labour MPs back Tony Blair's call to scrap triple lock\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nIn response to the continuation of fiscal drag as a policy, the CSPA has condemned the situation as fundamentally unjust.\n\nThe organisation stated: \"Pensioners on modest fixed incomes should not be penalised through frozen tax thresholds while everyday costs continue to rise.\"\n\nAnalysts calculate that had the personal allowance kept pace with inflation since 2021, it would currently stand between £15,000 and £17,000 rather than its present level.\n\nAdditional CSPA priorities include maintaining the 25 per cent tax-free pension lump sum and protecting ISAs alongside other tax-free savings vehicles.\n\n###\n\n\n\n\n###\n\n\n\n\nBecky O'Connor, the director of Public Affairs at PensionBee, described the threshold freeze as a stealth tax hitting workers when household finances are already stretched thin.\n\nShe said: \"As wage growth pushes more people into higher tax bands, fiscal drag increases the tax burden without any boost to take-home pay, breaching the Government's own promises and leaving families worse off.\"\n\nMs O'Connor warned that this concealed pressure damages people's capacity to save and prepare for retirement.\n\nThe retirement expert added: \"When everyday costs rise faster than earnings, pensions are often the first thing to be sacrificed, weakening long-term financial resilience and storing up problems for future retirees.\"\n\n###\n\n\n\n\n\n\n\n\n\n\n**Our Standards: The GB News Editorial Charter**",
  "title": "State pension tax to hit millions as older Britons prepare for 'unfair' HMRC policy"
}