Hmrc contacting eight million dwp state pensioners who are aged over 66

In what can only be described as a harsh setback, eight million state pensioners aged over 66 are braced to receive a concerning letter from HMRC. Currently, 904,000 individuals at state

pension age – born before 1959 – fall into the higher 40p tax rate bracket, with an additional 124,000 paying at the top 45p rate. Statistics reveal a significant uptick in the number of

pensioners taxed at the basic rate, climbing from 6.25 million in the fiscal year 2021-22 to 7.79 million this year. This surge from 455,000 and 39,000 respectively is attributed to

unadjusted income tax thresholds coupled with enhanced payouts from the Triple Lock — a result of the Conservative Party and Liberal Democrats coalition’s commitment made back in 2010 that

benefits the state pensioners through the Department for Work and Pensions (DWP) payments. Sir Steve Webb, speaking with The Times, a partner at LCP and former pensions minister, remarked:

"The higher rate threshold has become a real cliff-edge over which growing numbers of pensioners are falling." He noted both an overall increase in pensioners facing income tax,

and particularly those facing higher rates, reports Birmingham Live. On the other hand, a Treasury spokesperson conveyed: "We are committed to helping our pensioners live their lives

with dignity and respect, which is why we have frozen fuel duty and increased the state pension." They further reiterated: "Our commitment to the triple lock means millions will

see their state pension rise by up to £1,900 this parliament." Thanks to the Triple Lock, the state pension has impressively ascended from £8,093.80 in 2016 to £11,973 this year. The

Office for Budget Responsibility has forecasted that by April 2027, the full new state pension will be worth £12,885.50 - £315.50 over the £12,570 personal allowance, which is the amount of

tax-free income an individual can earn each year. Pensioners who have paid national insurance contributions for 35 years to qualify for the full state pension would then have to repay 20 per

cent of that £315.50 - losing £63, according to Quilter, the wealth manager. The number of pensioners paying higher rates of tax is set to rise further as personal allowances and tax

thresholds are set to be frozen until the start of the 2028-29 tax year.