WORKERS who defer their state pension for just a year risk being hit by a surprise £828 tax bill by 2030 owing to a Budget carve-out.
The freeze on income thresholds till 2031 led to fears millions would be forced to start paying when pensions pass the £12,750 personal allowance.
Chancellor Rachel Reeves has since promised that no one whose only income is their state pension will pay.
But the Treasury later clarified that workers who defer their state pension to take advantage of a 5.8 per cent boost — around one in ten — are excluded.
It means someone reaching state pension age in 2026-27 who defers for a year will get £13,608 a year in 2027–28 — £1,038 over the allowance and landing a £208 tax bill.
With the triple lock increasing the value of the pension over the following two years — and the allowance staying the same — the person would be charged around £275 in the second year and £345 in the third, bringing the total tax bill to £828.
And a pensioner who claims it in 2027-28 after a five-year deferral could be made to hand over £3,277.
Sir Steve Webb, a former pensions minister, blasted the policy for punishing responsible behaviour and warned it could create a “two-tiered” tax system.
He added: “The risk of losing money may cause some people to take their pension sooner instead of deferring and taking a higher pension later.”
THAMES HOPES
THAMES WATER is haggling over a rescue with creditors despite a jump in revenues.
The debt-laden utility firm said talks with the London & Valley Water consortium, the Government and regulators are positive but uncertainty remains.
The plan would write off some of its £20billion debt for looser targets.
Fuelled by April’s 31 per cent bill rise, earnings surged to £1.2billion for the six months to September.
SMITHS’ DEAL
SMITHS GROUP has agreed a £2billion deal to sell its arm that makes airport security scanners in a move to offload parts of the business following investor pressure.
The engineering organisation said the deal with private equity firm CVC Capital Partners is set to go through next year.
It will instead focus on its John Crane sealant division, and its Flex-Tek business, which makes heating elements.
NELSON AT BANK HELM
HSBC has snubbed George Osborne to appoint 76-year-old Brendan Nelson as its new chairman — a move seen as steadying the ship as the bank juggles London politics and growth in China.
The former Chancellor was in the frame but ex-KPMG partner Nelson, the interim boss since October, now has the job full-time following Sir Mark Tucker’s exit.
He faces overseeing a £1.1billion cost-cutting drive while trying to keep the peace between East and West.
Senior director Ann Godbehere praised Nelson’s “strong credentials”.
