Healey to Shield Low-Income Pensioners from Tax in First Budget

Chancellor John Healey is set to shield low-income pensioners from income tax in his first Budget, announced today ^[1]. The move comes as the full state pension is expected to rise by 3.9% to £13,036.40 annually from April 2027, surpassing the £12,570 personal tax allowance and triggering tax liability without intervention. To prevent this, Healey will introduce a new tax allowance specifically for pensioners on low incomes, fulfilling a prior government pledge not to tax those relying solely on the state pension.

Treasury sources say the Budget will be modest in scale, avoiding the sweeping tax and spending announcements of past years ^[1]. The chancellor’s allies argue the change will spare pensioners from unnecessary administrative hassle for minimal tax payments.

Meanwhile, the Conservatives and Reform UK have released alternative proposals. The Conservatives are pushing for cuts to green taxes, red tape, and welfare spending to reduce energy bills ^[1]. Reform UK is advocating 60 policies, including backing the controversial Rosebank oil field—a project that has not been confirmed to have Healey’s support.

The Liberal Democrats have called for a new growth and defence partnership with the EU, including single market access, to ease the tax burden on households ^[1]. The Green Party, led by Zack Polanski, has urged Healey to make the UK affordable by ending tax relief for data centres and redirecting funds to energy bill support.

Healey’s speech is expected to be finalised right up to Wednesday lunchtime, with the full Budget document to be published this evening ^[1]. The story was first reported by BBC News.