Triple lock to boost pensions by 3.9pc as Reynolds refuses to rule out tax raid

The Business Secretary refused four times to rule out retirees paying tax on the state pension from next year.

Jonathan Reynolds declined to reassure pensioners that they would not pay income tax on the benefit for the first time, saying it was a question for the Chancellor.

The comments on Tuesday raised concern for millions of retired people expecting to see their state pension surpass £13,000 from April, forcing them to pay income tax.

However, pensions minister Torsten Bell later insisted Labour would not put up taxes on people who rely on the state pension.

It is still unclear how this will be implemented given the complexity of separating the tax arrangements of different groups of pensioners.

The rise under the triple lock guarantee would drag many pensioners into paying income tax for the first time because their state income would surpass the personal allowance of £12,570.

Rachel Reeves, the former chancellor, said last year that people solely reliant on the state pension would not have to pay the tax.

However, Mr Reynolds was repeatedly asked on BBC Breakfast whether Labour would honour this commitment after the next increase in the state pension in April. He declined to answer four times.

He said: “I’m sorry, that is for the Chancellor and for a Budget.

“The majority of pensioners in this country don’t just rely on the state pensions. Some do, I accept that, but the majority don’t.

“Sometimes when this is looked at, we’re focusing just on the state pension side of this. You’ve got to consider the full range of income retired people in the UK have.”

However Mr Bell, the pensions minister, walked back from Mr Reynolds comments.

He said: “In line with the commitment made at Budget 2025, pensioners who only just exceed the personal allowance will not have the administrative burden of paying small amounts of tax in this Parliament.

“The Chancellor will set out further details on how that commitment will be delivered at the Budget.”

Former pensions minister Sir Steve Webb said only one in 16 pensioners would benefit from this policy.

He said: “Those on the new state pension can expect to see an increase of nearly £500 per year next April.

“But the sting in the tail is that this will take the standard rate of the new state pension above the tax threshold.”

The comments came after official figures on Tuesday indicated the triple lock will rise by 3.9pc from April.

Under the triple lock, the state pension rises each April in line with inflation, average wages or 2.5pc, whichever is highest.

Total pay, including bonuses, rose by 3.9pc in the three months to July, down from 4.2pc in the three months to June.

Pensioners may yet receive a bigger increase if September’s inflation figure is higher than 3.9pc. That will be revealed next month but a higher figure is thought to be unlikely.

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