Back to today’s briefing

Story perspectives

Chancellor Exempts State Pensioners from Income Tax Until 2029

11/28/2025

36 4 Full Breakdown

Summary

Story summary

Chancellor of the Exchequer Rachel Reeves announced that pensioners who rely solely on the state pension will not pay income tax during this parliamentary term, which ends in 2029.
The policy targets those with only state pension income, projected to exceed the £12,570 threshold by April 2027.
Experts warn the plan could create a two-tier system, and many pensioners with extra income would still face tax demands.

History

Historical Context

The Income and Corporation Taxes Act of 1970 reformed UK taxation, introducing a personal allowance of £1,000 that affected millions. This act marked a shift in tax policy, as subsequent governments, including those led by Margaret Thatcher in the 1980s, favored lower personal income tax rates. Chancellor Rachel Reeves' recent announcement highlights ongoing debates about tax equity, particularly for pensioners reliant on state pensions.

1 of 2

Story summary

Chancellor of the Exchequer Rachel Reeves announced that pensioners who rely solely on the state pension will not pay income tax during this parliamentary term, which ends in 2029.
The policy targets those with only state pension income, projected to exceed the £12,570 threshold by April 2027.
Experts warn the plan could create a two-tier system, and many pensioners with extra income would still face tax demands.

1 / 2