Department for Work and Pensions (DWP) state pension payments increased 4.1 per cent this month in line with the triple lock.
State pensioners risk losing £8,000 to DWP and ‘many won’t see it coming’
State pensioners face losing £8,000 with older UK households warned ” many won’t see it coming”. Department for Work and Pensions (DWP) state pension payments increased 4.1 per cent this month in line with the triple lock.
But if payment rates increase by 5% or more next year, the full new state pension will become subject to income tax, which could impact some pensioners’ finances in ways they don’t realise.
Rebecca Lamb, external relations manager at Money Wellness, warned: “Many people understandably assume that a small rise in their pension is a good thing.
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“But if it pushes them just over the personal tax allowance, it won’t just mean paying a bit of income tax – it could disqualify them from Pension Credit, which in turn opens the door to a much larger loss.
“Pension Credit acts as a gateway to a wide range of help: Housing Benefit, Council Tax Reduction, free NHS dental and eye care, the Warm Home Discount, Cold Weather Payments, and even the free TV licence for over-75s.
“In total, someone could end up losing more than £8,000 a year in support, all because their pension creeps just above the threshold.” She explained: “What’s most worrying is that many won’t see it coming.
“There’s no clear warning when someone is about to lose entitlement, and pensioners who aren’t online or don’t have support with money matters may not realise until it’s too late.”
In reply, one Brit fumed in response to the change: “good, tired of paying for people that didn’t properly plan their retirement.” A second said: “I just think it’s going to be amusing watching the mayhem of the HMRC chasing thousands if not millions of pensioners for a few quid of tax.
“Reeves needs an accountant to complete her tax returns and so many pensioners wouldn’t have a clue.” A third said: “They will deduct the tax from their pensions before paying it, as they already do.”
Another said: “It would be a sad day indeed if the threshold was not increased in line with the increase.”