Thousands of pensioners will have to start paying income tax due to the massive rise in the state pension that is expected next April. The state pension is set to jump by 8.5% due to rising wage growth. This means the full new state pension – paid to those who reached state pension age after April 2016 – will increase by more than £900 a year to £11,502. The basic state pension will rise to £8,814.
While pensioners and those approaching retirement will be cheering the 8.5% rise – the second-biggest increase to the state pension – many will be dragged into the income tax net and will have to start paying tax on their income.
The website Money Week has an article that looks in detail at the situation – read here