Fact check: Pensioners paid £19.5 billion in income tax in year ending 2022
In the ITV Debate on Tuesday June 4, Prime Minister Rishi Sunak said: “For the first time in our country’s history, if Labour are elected pensioners will pay tax.”
Evaluation
Pensioners currently pay income tax on any amount they get over a £12,570 threshold.
The state pension is less than that, however people with a private pension which takes them above that threshold will pay income tax.
The facts
The income tax threshold is set at £12,570 per year. If a pensioner has a combined state and personal pension income above that threshold they will pay tax on that extra amount.
Data released in September showed that in the year ending March 2022 pensioners paid £19.5 billion in income tax on payments from their private pensions.
In the year ending March 2023, 62% of people aged 65 or over paid income tax. That is a rise from 49% in the year ending March 2011 and from 36% in the year ending March 1991.
When Mr Sunak said that pensions have not been taxed before in history, he is likely referring just to the state pension.
The full state pension is currently £11,502 per year, so someone who has no other income does not pay income tax.
Mr Sunak has proposed a new policy – called the triple lock-plus by some – which would see the threshold at which pensioners have to pay income tax rise so that even if the state pension increases it will never rise above the income tax threshold.
This would reverse a previous Conservative policy which was to freeze the income tax threshold for both workers and pensioners until the year ending March 2028.
Links
Sunak v Starmer: The ITV Debate
IFS – A new triple-locked personal allowance for pensioners? (archived)
Private pension statistics commentary: September 2023 (archived)
