The reported £13,036 income tax allowance for pensioners would apply only to those with no other income, according to an AOL report on 27 October. The Treasury has not confirmed the plan.
Standard Life says the allowance could save pensioners who rely on the state pension alone £770 a year if it is still in place by 2031. That estimate has not been independently checked.
Aegon's head of pensions Kate Smith warns that the plan risks making pensioners who have saved for retirement feel penalised.
The reported eligibility limit fits the cliff edge raised earlier. 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.
The allowance is reported to be set at £13,036 to match the expected full new state pension from April. The personal allowance is frozen at £12,570 until April 2031.