{"id":59148,"title":"Business Secretary declines to rule out tax on state pensions","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2026-09-16T06:04:19+00:00","modified":"2026-09-16T06:04:19+00:00","canonical_url":"https://stockmark.it/reynolds-refuses-four-times-to-rule-out-tax-raid-on-state-pensioners/","markdown_url":"https://stockmark.it/reynolds-refuses-four-times-to-rule-out-tax-raid-on-state-pensioners.md","json_url":"https://stockmark.it/reynolds-refuses-four-times-to-rule-out-tax-raid-on-state-pensioners.json","category":"Business","categories":["Business","Pensions","Tax"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/2026/09/business-secretary-declines-to-rule-out-tax-on-state.png?fit=1536%2C1024&quality=80&ssl=1","format":"news","language":"en-GB","content":"The Business Secretary has refused to rule out the prospect of retirees paying income tax on the state pension from next year, a stance that has generated significant concern among millions of retired individuals. Jonathan Reynolds, speaking on BBC Breakfast on Tuesday, declined four separate attempts to reassure pensioners that they would be exempt from taxation on this benefit. He indicated that the matter is a decision reserved for the Chancellor and will be addressed during the upcoming Budget. The comments come as official figures suggest the state pension is set to surpass the £13,000 threshold for the first time in April, a level that would force many recipients to pay income tax for the first time.\n\nThe uncertainty surrounding the tax treatment of state pensions has prompted a clarification from the Pensions Minister, Torsten Bell. Mr Bell insisted that the Labour government would not increase taxes for those who rely solely on the state pension. He reaffirmed a commitment previously made by former Chancellor Rachel Reeves, stating that pensioners who only slightly exceed the personal allowance would not face the administrative burden of paying small amounts of tax during this Parliament. The Chancellor is expected to set out further details on how this commitment will be delivered at the next Budget. However, it remains unclear how this policy will be implemented, given the complexity of separating the tax arrangements for different groups of pensioners.\n\nThe impending rise in the state pension is driven by the triple lock guarantee, which ensures that benefits increase in line with the highest of average wages, inflation, or a baseline of 2.5 per cent. Official data released on Tuesday indicated that total pay, including bonuses, rose by 3.9 per cent in the three months to July. This figure is expected to determine the annual increase, as September’s inflation rate is unlikely to surpass this level. Consequently, the standard rate of the new state pension is projected to move above the personal allowance of £12,570, dragging many recipients into the tax net. Former pensions minister Sir Steve Webb noted that while only one in 16 pensioners would benefit from the specific exemption for those just over the threshold, the overall increase would still see the standard pension exceed the tax threshold.\n\nThe fiscal implications of the triple lock are placing increasing pressure on public finances ahead of the first Budget under the new Chancellor, John Healey. Economists have warned that the mechanism, which costs over £12 billion a year and rising, creates a difficult position for the government. Liam McLaughlin of the National Institute of Economic and Social Research stated that with consumer price inflation unlikely to surpass earnings by September, the 3.9 per cent increase will add fiscal pressure at a time when the triple lock is already under scrutiny. The Institute for Fiscal Studies has calculated that state pensions cost £16 billion more a year than they would have without the triple lock, with spending on the benefit being £47 billion higher after adjusting for inflation than in 2010.\n\nPolitical opposition has intensified in response to the potential tax changes and the broader economic context. Andrew Griffith, the shadow chancellor, criticised the Labour government for creating uncertainty for businesses by refusing to rule out further tax rises. He argued that the government’s stance, combined with falling job vacancies and wage pressures, demonstrates a lack of support for employers. Meanwhile, the cost of living crisis continues to affect workers, with the Resolution Foundation reporting that the average private sector worker’s weekly earnings are now £2 lower in real terms than in October of last year. Despite the significant rise for pensioners, the economic outlook for private sector employees remains challenging, with wage growth slipping to its lowest level in nearly six years and job vacancies falling to their lowest point since spring 2021."}