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In excess of 1 million pensioners will face a higher income tax rate this year. The Personal Allowance will remain frozen at £12,570 until the 2027/28 financial year, as confirmed by the
Labour Party government, reports Birmingham Live. Charlene Young, a senior pensions and savings expert at AJ Bell, cautions: "The nation has fallen victim to the effects of fiscal drag
in recent years. "Frozen allowances and tax thresholds have pulled more people into the tax system for the first time and hiked the rates of tax people pay as their income rises and
they breach a new tax band. "Pensioners are not shielded from it either - over 1 million people above state pension age will exceed the 40% higher rate threshold this tax year, more
than double the number there were when the big freeze began." Ms Young continued: "The UK Government is in a straitjacket thanks to its own fiscal rules, and these figures will
bolster the arguments of those calling for state pension reform. The full 'new' State Pension is close to breaching the tax-free Personal Allowance, and many pensioners already
receive well above this thanks to the way benefits could be built up under the old system." "The Labour Party has repeatedly pledged to protect the Triple Lock guarantee and has
paused further hikes to the State Pension age beyond those due to start in 2026. "But with pensioner spending predicted to top 50 per cent of the welfare bill by the end of the decade,
and the rise in State Pension age from 66 to 67 set to save £10 billion in borrowing, can it really continue to ignore calls for further reform?". In April, the New and Basic State
Pensions saw a 4.1 per cent uplift. Despite this, future projections from the Labour Government anticipate an increase of just 2.5 per cent across the next four fiscal years. Based on these
estimates, the full New State Pension is expected to reach £12,578.80 in the financial year 2027/28, exceeding the Personal Allowance by £78.80.