Chancellor's tax threshold freeze to hit 100 per cent of pensioners, says IFS
# Chancellor's Tax Threshold Freeze to Impact All Pensioners, Warns IFS
## Report Indicates Freeze Will Burden Pensioners, Benefit Claimants, and Low-Wage Workers
The Institute for Fiscal Studies (IFS) has highlighted that the Chancellor's decision to freeze tax thresholds will affect every pensioner in the UK. This policy will also impact those on benefits and minimum wage earners, placing a significant financial strain on vulnerable households. The freeze is set to extend the current tax burden on these groups beyond what was previously expected.
The IFS has projected that if the tax threshold remains frozen, the number of taxpayers in families receiving universal credit (UC) will swell to 3.1 million. This represents an increase of 690,000 taxpayers compared to a scenario without the freeze and is 110,000 higher than the current policy's predictions. "Since most means-tested benefits are by default uprated in line with inflation, individuals in households that receive means-tested benefits are increasingly likely to also pay income taxes," the IFS reported.
The implications of this freeze are particularly severe for pensioners, who typically depend on fixed incomes. With inflation continuously eroding purchasing power, these groups will see their tax liabilities increase while their income remains stagnant. As a result, many will face heightened financial insecurity and a reduced standard of living.
Moreover, vulnerable families, especially those relying on minimum wage jobs, will find their financial situations exacerbated. The continued tax burden may force many to reconsider their employment status, opting to work fewer hours or leave the workforce entirely.
This policy shift poses serious questions about the government's commitment to economic support for the most vulnerable demographics in society, particularly as they grapple with rising living costs.