Overview
- Reports say the chancellor has told officials, including the OBR, that personal tax increases are among major measures under consideration for this month’s Budget, while the Treasury declined to comment on speculation.
- One option described would raise income tax by 2p and cut employee National Insurance by 2p on earnings between £12,571 and £50,270, leaving most workers broadly unchanged but increasing bills for pensioners who do not pay NI.
- AJ Bell estimates some additional‑rate pensioners could pay up to £2,502.80 more a year, with nearly nine million pensioners facing higher tax and about 124,000 affected at the 45% rate.
- The reported approach would concentrate the burden on retirees and other non‑NI payers such as landlords and the self‑employed, and it would run against Labour’s manifesto promise not to raise VAT, NI or income tax.
- Separately confirmed changes include bringing unspent pensions into inheritance tax from April 2027 and making the winter fuel payment taxable, while a Fabian Society call to cut the tax‑free pension lump sum remains a think‑tank proposal rather than government policy.