UK pensions warning: don’t get caught by an out-of-the-blue tax bill

State pensioners could be dragged into the tax net next year, says former minister

Hundreds of thousands of pensioners will have to start setting aside some of their state pension for unexpected tax bills, a former UK government minister has claimed.

A combination of big increases in the state pension – with a rise of 8.5% scheduled for next spring – and a continued freeze in income tax thresholds means growing numbers of older people will be dragged into the tax net “purely on the basis of their state pension”, says the ex-pensions minister Steve Webb.