Closed petition Make pension income exempt from income tax
The Government is, quite rightly, encouraging people to contribute to private pension schemes so they are not relying solely on the State pension when they stop working. However, once a combined pension income reaches the £12,500 personal allowance, they are being taxed on their pension income.
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With the State pension at roughly £9,500 pa, a person only needs an additional £3,000 pa from a private pension before they start being taxed on the additional income. This is something they have contributed to throughout their working life to allow them a comfortable retirement. I would like to suggest that pension income is exempted from income tax. Alternatively, the personal tax allowance for people in receipt of state pension could be increased.
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