Healey to shield low-income pensioners from income tax in first Budget
State pension rise would push payments above tax threshold; chancellor plans new allowance
Chancellor John Healey will use his first Budget on Wednesday to protect low-income pensioners from income tax, according to the BBC. The full flat-rate state pension is expected to increase by 3.9% to £13,036.40 a year from April, taking it above the £12,570 personal tax allowance and making it liable for income tax unless changes are made. Healey will announce a new tax allowance for low-income pensioners to ensure they are not taxed, fulfilling a government pledge not to tax those whose only income is the state pension.