{"id":82797,"date":"2025-05-07T20:51:10","date_gmt":"2025-05-07T20:51:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/82797\/"},"modified":"2025-05-07T20:51:10","modified_gmt":"2025-05-07T20:51:10","slug":"state-pension-payments-could-be-postponed-to-offset-stealth-tax-from-fiscal-drag","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/82797\/","title":{"rendered":"State pension payments could be ‘postponed’ to offset stealth tax from fiscal drag"},"content":{"rendered":"

Britons are being urged by analysts to defer accessing their state pension payments to offset a looming “stealth tax” <\/a>resulting from fiscal drag.<\/p>\n

According to recent HM Revenue and Customs (HMRC) obtained by wealth management firm Quilter<\/a>, nearly 32 million people will impacted by this phenomenon by 2027-28.<\/p>\n

Fiscal drag occurs when tax thresholds remain frozen <\/a>while incomes rise which results in Britons being pulled into higher tax brackets.<\/p>\n

Tax thresholds have been frozen since 2021-22 and will remain at current levels until 2028-29, creating a seven-year stretch of fiscal stagnation.<\/p>\n

\"Pensioner<\/p>\n

Analysts are suggesting Britons “postpone state pensions” to bolster their income<\/p>\n

GETTY <\/p>\n

Nearly 18 million people will be dragged into the tax net for the first time due to this “stealth tax” with a further 12 million Britons will start paying the higher 40 per cent. tax rate.<\/p>\n

Furthermore, around two million more Britons will trip above the 45 per cent threshold, which kicks in when earnings exceed \u00a3125,140.<\/p>\n

For those approaching retirement age, around eight million in this group are set to start paying tax for the first time are over the age of 60.<\/p>\n

This demographic largely consists of individuals who have retired from work and are living off their existing accumulated wealth.<\/p>\n

Do you have a money story you\u2019d like to share? Get in touch by emailing money@gbnews.uk.<\/a><\/strong><\/p>\n

\"FamilyBritons are being dragged into higher tax brackets due to fiscal drag GETTY <\/p>\n

Analysts note that fiscal drag has been popular for policymakers as it allows them to avoid the inevitable backlash that would accompany raising headline tax rates.<\/p>\n

As well as this, it has become lucrative for the Treasury. Office for Budget Responsibility (OBR) figures show that freezing tax thresholds will raise \u00a342.9billion by 2027-28.<\/p>\n

This substantial sum is roughly double what the government currently collects from inheritance tax and capital gains tax combined.<\/p>\n

For those facing this tax squeeze, financial experts are highlighting the strategies those approaching retirement should consider to sidestep this tax hike.<\/p>\n

Craig Rickman, personal finance editor at interactive investor, suggests one option for older citizens which could impact their state pension.<\/p>\n

“You can postpone your state pension and there can be financial advantages to doing so,” Rickman said.<\/p>\n

LATEST DEVELOPMENTS:<\/strong><\/p>\n

\"Pensioner<\/p>\n

Older britons are concerned about the rising tax burden <\/p>\n

GETTY<\/p>\n

He explains that deferring increases the amount by one per cent for every nine weeks, totalling 5.8 per cent annually.<\/p>\n

“Given the current full state amount, this could equate to an extra \u00a3694.43 in 12 months’ time,” Rickman notes.<\/p>\n

“This approach might suit those who are still receiving a working income, which could result in a large portion of their state pension being swallowed up in tax.<\/p>\n

“However, you do need to watch out here, as you would forfeit a year\u2019s state pension payment, which unless you live for around a couple of decades, could mean you were better off claiming it as soon as you could.”<\/p>\n","protected":false},"excerpt":{"rendered":"Britons are being urged by analysts to defer accessing their state pension payments to offset a looming “stealth…\n","protected":false},"author":2,"featured_media":82798,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,1016,1232,617,2499,512,1786,1200,16,15],"class_list":{"0":"post-82797","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-hmrc","11":"tag-money","12":"tag-pensions","13":"tag-personal-finance","14":"tag-sgg","15":"tag-state-pension","16":"tag-tax","17":"tag-uk","18":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114468532042154317","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/82797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=82797"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/82797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/82798"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=82797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=82797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=82797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}