Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether she has had discussions with the Chancellor of the Exchequer on raising the level of the personal tax-free allowance in line with the basic state pension.

Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)

The DWP Secretary of State engages regularly with the Chancellor of the Exchequer. As the Minister for Pensions, I also serve as a Parliamentary Secretary at HM Treasury. Currently the Personal Allowance, which is the amount an individual can earn before paying tax, is higher than the full rates of both the basic and new State Pensions. This means pensioners whose income is solely the full new State Pension or basic State Pension will not pay any income tax.

The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. At our first Budget, we decided not to extend the freeze on personal tax thresholds.

Under the previous Government the vast majority of pensioners already pay Income Tax. When individuals’ wider income was taken into account in 2022/23 over 80% of pensioners had an income over the Personal Allowance Tax Threshold.

This Government is absolutely committed to supporting pensioners and giving them the dignity and security they deserve in retirement.

Over 12 million pensioners will benefit from our commitment to protect the Triple Lock which is set to increase spending on the State Pension by around £31 billion and will increase people’s yearly State Pensions by up to £1,900 this Parliament.