Make the state pension tax exempt

Exempting the State Pension from income tax would be expensive and add complexity to the tax system. The government has no current plans to make the State Pension tax exempt. When it comes to taxes, social security benefits are treated differently depending on why they are paid. Generally, benefits that replace income, like the State Pension, are taxable. Exempting the State Pension from income tax would be expensive at a time when the Government has inherited a very challenging set of fiscal circumstances. Individuals earning above the higher rate threshold would benefit more than those with incomes below, and those earning below the Personal Allowance would not benefit at all. The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way. HM Treasury This is a revised response. The Petitions Committee requested a response which more directly addressed the request of the petition. You can find the original response towards the bottom of the petition page (https://petition.parliament.uk/petitions/710017)