Pensioners may need to earn nearly £25,000 more by 2030 to maintain a "comfortable" retirement if the Government extends the freeze on income tax thresholds beyond 2028, according to analysis by trade body Pensions UK. The ongoing freeze on tax thresholds has led to more retirees being taxed as inflation increases incomes. Chancellor Rachel Reeves has committed to keeping thresholds frozen until at least 2028 but she and Prime Minister Sir Keir Starmer have refused to rule out an extension as the Government looks to tackle a £22bn budget shortfall. Alan Barral, financial planner at Quilter Cheviot, said: "With the UK facing significant fiscal challenges, there's a real risk that Rachel Reeves may feel compelled to backtrack on Labour's pledge to unfreeze thresholds." Baroness Altmann, a former Pensions Minister, has warned extending the freeze would disproportionately affect poorer pensioners as state pensions would start to exceed the £12,570 tax-free allowance.
