Prime Minister Andy Burnham's promise that people relying solely on the state pension will not become income taxpayers still has no published mechanism or cost, according to a Budget preview by Philip Shaw for Business News on 23 October.
The pledge comes from Burnham himself and predates the pensions minister Torsten Bell's September promise of new tax rules for pensioners. AOL reported in July that Burnham confirmed state pensioners with no other income will be exempt from income tax. St James's Place listed the exemption among his first-week announcements.
The Budget, which the Chancellor, John Healey, delivers on Wednesday 28 October, is expected to be where the exemption is set out.
The problem it is meant to solve is borne out by the published figures. ii.co.uk put the full state pension at £12,547 a year, £23 below the £12,570 personal allowance, which has been frozen since 2021. AOL says the issue bites from April 2027, when the state pension will exceed the allowance. Britbrief puts next year's full new State Pension at around £13,036.