The new income tax allowance for low-income pensioners would rise in line with the state pension for the rest of this parliament, the Telegraph reports, citing the Times. The Treasury has not confirmed the plan.
The allowance, reported earlier on Monday, would be set at £13,036 to match the expected full new state pension from April. That is about £466 above the £12,570 personal allowance, which is frozen until April 2031.
Brit Brief projects the full state pension reaching £263.35 a week, or £13,694 a year, by 2029/30. On those figures it would sit £1,124.20 above the frozen personal allowance. The arithmetic holds up, and it means the gap the new allowance has to cover grows each year.
Brit Brief also attributes the reported cost of about £200m a year by 2030 to calculations by Steve Webb of LCP. The Telegraph says only that this is reportedly the cost. Brit Brief quotes Webb describing the proposed solution as "messy and increasingly expensive".
The cliff edge remains a concern. The Express reports that a pensioner on the full new state pension with £1 of other taxable income could lose the exemption and face a bill of about £93.