DWP data dismantles Rishi Sunak's claim of State Pension tax 'raid' as 1.5m already pay

Julie Etchingham with Conservative Prime Minister Rishi Sunak (L) and Labour leader Sir Keir Starmer (R) before hosting the first head-to-head debate of the General Election
-Credit: (Image: Getty Images)

Labour leader Sir Keir Starmer and Prime Minister Rishi Sunak clashed repeatedly during the first televised debate of this year's general election (June 4), as both contenders for Number 10 tried to lay out to voters who would be best to run the United Kingdom.

Following the debate, the Prime Minister's many claims that a Labour government would raise taxes on ordinary households by £2,000, while also taxing people claiming the State Pension, were challenged by finance and pensions experts. After being pressed by Sunak about a pension tax "raid", Starmer called his claims "garbage."

Former Radio 4 Money Box presenter Paul Lewis took to X, formerly Twitter, to reveal data from the Department for Work and Pensions (DWP) that showed a whopping 1.5 million people claiming the State Pension were already paying income tax under the Conservative government.

READ MORE: Will Labour increase tax? Reality of tax policy after '£2,000 per family' Rishi Sunak claim

Following a Freedom of Information (FOI) request by Mr Lewis, the DWP admitted that around one in 10 pensioners are paying tax. Posting on X alongside the debate, Paul Lewis said: "Sunak: we will ensure the state pension is never subject to tax. Hmmm.

"DWP told me in an FOI that 1.5 million people already have a state pension which by itself is liable to tax.

Election debate Starmer V Sunak
Starmer and Sunak squared off in front of a live ITV audience in Salford -Credit:No credit

The current minimum tax threshold, which has been frozen since the pandemic, is £12571, while the full State Pension pays out £11,502 per year. Meaning that any income over this bracket is taxed, so income from private pensions or other sources can easily push many into paying income tax.

Many workers build up private pensions during their working life and can withdraw this money either as a lump sum payment, or as an annuity, when they reach the minimum age set by the scheme, or the State Pension age of 66. Though a certain amount of this money can be claimed tax-free, frequently this increased income can push older people into paying tax.

Also disagreeing with the Prime Minister's claim, HM Revenue and Customs' pension guide shows that frozen income tax thresholds are already making life harder for people later in life. HMRC explains: "Your pension provider will usually take off any tax you owe before they pay you. They’ll also take off any tax you owe on your State Pension.

Election debate Keir V Starmer
Rishi Sunak went on the attack during the ITV debate, but experts have challenged his claims -Credit:ITV

"If you get payments from more than one provider (for example, from a workplace pension and a personal pension), HM Revenue and Customs (HMRC) will ask one of your providers to take the tax off your State Pension.

"At the end of the tax year you’ll get a P60 from your pension provider showing how much tax you’ve paid."

Money Saving Expert founder Martin Lewis was also quick to refute the Prime Minister's claims that Labour would tax pensioners, more than the Conservatives already were. Posting on X, he said: "Sunak "For the first time in UK history pensioners will pay tax". Is very inaccurate phrasing.

"Pensioners do pay tax just like everyone else. What he's talking about is paying tax if you get the full State Pension and have no other income."