Personal Allowance frozen until April 28

art123_2

I just noticed that the personal allowance of £12570 is being frozen until April 2028.  Next year the state pension is predicted to go up by 7% to £11342, and further annual increases before 2028 will surely mean that it will end up above the personal allowance by 2028.  

So does this mean that a pensioner with no other income other than the state pension now end up in the tax bracket, which in turn would mean that as a taxpayer they couldn't transfer the marriage allowance to their partner.

This all doesnt seem quite right.  Can anyone please tell me if I'm understanding this correctly or not.

Dazed_and_C0nfused

art123_2 said:

I just noticed that the personal allowance of £12570 is being frozen until April 2028.  Next year the state pension is predicted to go up by 7% to £11342, and further annual increases before 2028 will surely mean that it will end up above the personal allowance by 2028.  

So does this mean that a pensioner with no other income other than the state pension now end up in the tax bracket, which in turn would mean that as a taxpayer they couldn't transfer the marriage allowance to their partner.

This all doesnt seem quite right.  Can anyone please tell me if I'm understanding this correctly or not.

I don't know why you think this would mean Marriage Allowance couldn't be used 🤔

It might not be of benefit to a couple overall but you have to be a higher rate payer before you become ineligible.

Someone who has applied for Marriage Allowance will currently have a reduced Personal Allowance of £11,310 so using your figures will become liable to tax from April 2024.

But they will only owe either £6.08 or £6.40 so presuming their spouse's saves more than that from receiving Marriage Allowance it is still beneficial to leave Marriage Allowance in place.

Personally I think CPI is likely to be a bit less than 7% by September but certainly by 2025-26 anyone receiving the standard new State Pension and applying for Marriage Allowance is almost certainly going to have some tax liability.

Don't forget the majority of people getting State Pension at the moment receive the basic State Pension not the new State Pension so might less of an issue for most people.

MK62

art123_2 said:

I just noticed that the personal allowance of £12570 is being frozen until April 2028.  Next year the state pension is predicted to go up by 7% to £11342, and further annual increases before 2028 will surely mean that it will end up above the personal allowance by 2028.  

So does this mean that a pensioner with no other income other than the state pension now end up in the tax bracket, which in turn would mean that as a taxpayer they couldn't transfer the marriage allowance to their partner.

This all doesnt seem quite right.  Can anyone please tell me if I'm understanding this correctly or not.

It's possible that "a pensioner with no other income other than the state pension" will end up being a BR taxpayer, but we'll have to wait and see.....a lot can (and probably will) happen in the next 5 years.......personally I suspect this won't actually happen, but you never know.

A taxpayer can still transfer their marriage allowance to their partner......it's just that once both incomes are beyond the standard PA, for most people there is probably little point in doing so....

subjecttocontract

There will be a change of Gov' before 2028 so all plans will be binned and things could be far, far worse !

Doctor_Who

art123_2 said:

I just noticed that the personal allowance of £12570 is being frozen until April 2028.  Next year the state pension is predicted to go up by 7% to £11342, and further annual increases before 2028 will surely mean that it will end up above the personal allowance by 2028.  

So does this mean that a pensioner with no other income other than the state pension now end up in the tax bracket, which in turn would mean that as a taxpayer they couldn't transfer the marriage allowance to their partner.

This all doesnt seem quite right.  Can anyone please tell me if I'm understanding this correctly or not.

A very similar thread was on the Pensions board a few days ago:

https://forums.moneysavingexpert.com/discussion/comment/80165381/#Comment_80165381

art123_2

Thank to everyone for your comments.  Didn't realise there was a similar thread recently.