The Chancellor, John Healey, will use Wednesday's Budget to create a new £13,036 income tax allowance for low-income pensioners, according to reports on Monday 26 October. The Treasury has not confirmed the detail.
The measure would deliver Prime Minister Andy Burnham's promise that people relying solely on the state pension will not become income taxpayers. Until now, no mechanism or cost had been published.
The BBC reports that the full flat-rate state pension is expected to rise 3.9% to £13,036.40 a year from April. That is above the £12,570 personal allowance, which is frozen until April 2031.
The Express, citing the Times, reports the allowance will help about one million pensioners and cost around £200m a year by 2030. The Treasury has not confirmed these figures.
Express commentary says a pensioner on the full new state pension would otherwise owe about £93 a year in income tax. That holds up. The £466.40 above the allowance, taxed at the 20% basic rate, comes to £93.28.
The same commentary warns of a cliff edge, saying someone with £1 more income could lose the exemption and face a bill of about £93. This is a columnist's analysis, not a Treasury figure. It also says about 12.5m of roughly 13.5m pensioners would see no direct benefit.