Nigel Farage has erupted at calls for the Chancellor to hit pensioners with a tax raid. A Labour-linked think tank has urged Rachel Reeves to cut national insurance and increase income tax in her upcoming Budget.
The move proposed by the Resolution Foundation would target groups including OAPs, landlords and the self-employed. But speaking on his GB News show, Reform UK leader Mr Farage said: “Well it strikes me that we do have a darkening economic situation.
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“Inflation is a lot more persistent than anybody thought it was going to be. The Government’s ability to borrow, issuing gilts, becoming more and more expensive with almost every week that goes by.
“But here’s my problem with it, two Friday’s ago I got my pension statement through, I looked through it and it said in 2027 that this pension pot of mine would be subject to inheritance tax.
“And I thought, why the hell did I bother? Why did I bother all through the 90s and the early noughties to put money aside every year.
“I didn’t buy new cars, didn’t go to Barbados, I put the money aside thinking not only is it a pension for me, but if I drop down dead it’s money for the family.
“I think if they were to do these things in this budget it is a direct attack on thrift, a direct attack on saving.
Reform UK leader Nigel Farage has hit out at the Chancellor (Image: GB NEWS)
“People will think to hell with it, we’ll spend it all down the pub or elsewhere and when we get old the state will simply look after us.”
It comes as Ms Reeves prepares to deliver a Budget in November that is widely expected to see major tax rises as she battles to meet her fiscal rules.
Among the tax changes suggested by the Resolution Foundation was a 2p cut in national insurance, matched by a 2p rise in income tax.
The think tank argued that the switch would raise £6 billion and help tackle “unfairness” in the tax system.
Nigel Farage erupts at calls for Rachel Reeves to slap pensioners with more tax
Nigel Farage has launched a fresh attack on calls for pensioners to shoulder a greater share of Britain’s tax burden, as growing pressure over the cost of the state pension puts the government’s treatment of older people under renewed scrutiny.
The Reform UK leader has argued that pensioners who have spent decades working and paying into the system should not be singled out for additional taxation at a time when many households are already facing rising living costs.
His intervention comes as the debate over the pension triple lock intensifies ahead of the Autumn Budget. The issue has become increasingly sensitive because the state pension is rising while the personal income-tax allowance has remained frozen at £12,570 since 2021.
The combination means more pensioners can potentially find themselves paying income tax, even when the government has not explicitly announced a new tax rate for older people.
That distinction is important.
The controversy is not simply about whether Rachel Reeves has announced a new “pensioner tax”. Instead, it concerns the interaction between pension increases, frozen tax thresholds and the government’s wider efforts to balance the public finances.
Why pensioners are facing a tax squeeze
The full new State Pension is currently worth £241.30 a week, or approximately £12,548 a year.
The triple lock guarantees that the State Pension normally rises each April by whichever is highest of average earnings growth, inflation or 2.5%.
Current earnings data suggests the full new State Pension could rise by around 3.9% in April 2027, taking it to approximately £250.70 a week, or £13,036 a year. The final figure depends on the inflation component of the triple lock and the relevant official data.
That projected annual pension would be above the £12,570 personal allowance.
In simple terms, a person receiving only the full new State Pension could technically have taxable income above the standard tax-free threshold.
The government has nevertheless committed to ensuring that pensioners whose only income is the State Pension will not have to pay income tax during the current Parliament.
Rachel Reeves told MPs in March that the government was working on the mechanism for delivering that commitment and would provide further details.
The issue is therefore more complicated for pensioners with additional income.
Someone receiving a private pension, earnings from employment, savings interest or dividends may already have a taxable income above the personal allowance.
Farage’s criticism
Farage has made pensioner taxation part of his wider criticism of Labour’s approach to taxes and public spending.
In September, he warned that the combination of frozen tax thresholds and rising pensions could pull millions more older people into the tax system.
However, independent fact-checking has highlighted an important qualification to the claim.
Full Fact found that approximately 9.6 million people of state pension age are currently liable for income tax, but most would be paying tax even without the frozen personal allowance. The Office for Budget Responsibility estimates that around 600,000 additional pensioners had been brought into income tax by the freezes by 2026/27, with that figure forecast to reach around one million by 2030/31.
That means the statement that the government is simply “dragging nine million pensioners” into taxation because of frozen thresholds is misleading.
The underlying tax issue is nevertheless real.
If the tax allowance remains fixed while pensions and other incomes rise, more people can cross the threshold over time.
This mechanism is commonly described as fiscal drag.
The triple lock at the centre of the argument
The controversy also brings the future of the triple lock into focus.
The policy was introduced in 2010 and has since become one of the most important guarantees attached to the State Pension.
Supporters argue that it protects pensioners from inflation and ensures that retirement incomes do not fall too far behind wages.
Critics argue that the policy can become increasingly expensive, particularly as Britain’s population ages.
Recent commentary has called for changes to the system, including proposals to replace the triple lock with a different mechanism.
Reform, however, has explicitly reaffirmed its commitment to the triple lock.
In a statement published this week, the party argued that abandoning the guarantee would place an unfair burden on pensioners. Reform said someone receiving the State Pension currently gets around £241 a week and argued that this is hardly an excessive income given the cost of food, energy and housing.
The party has therefore positioned itself against suggestions that pensioners should be the first group asked to accept reductions in support.
Why some politicians want change
The argument for reform is largely fiscal.
Britain faces substantial long-term pressures from an ageing population, health spending and pensions.
The Office for Budget Responsibility has warned that the UK’s fiscal outlook remains challenging, while the House of Lords Library has highlighted rising borrowing costs and limited room within the government’s fiscal rules.
The State Pension is one of the largest components of government spending.
If pension payments continue increasing faster than the government’s ability to raise revenue, ministers face difficult choices.
Those choices could include increasing taxes, reducing other expenditure, changing pension policy, increasing the State Pension age or modifying the triple lock.
The debate is therefore not simply about pensioners.
It concerns how the government distributes limited public resources between generations and across different areas of spending.
Is taxing pensioners the same as cutting their pensions?
No.
There are several separate mechanisms.
The first is the amount of State Pension paid by the government.
The second is the amount of income a person can receive before paying income tax.
The third is the tax rate applied once income exceeds the relevant allowance.
A pensioner could therefore receive a higher State Pension but have less disposable income if other taxable income rises and tax thresholds remain frozen.
That is why pensioners can experience a tax increase without the government explicitly increasing the tax rate on pensions.
The distinction has become particularly relevant because the full new State Pension is expected to exceed the personal allowance in 2027.
The government has said it will protect pensioners whose sole income is the State Pension, but people with additional income can face different circumstances.
What about wealthier pensioners?
Another major part of the argument concerns whether all pensioners should be treated in the same way.
Some older households have substantial private pensions, property wealth and savings, while others depend largely or entirely on the State Pension.
Critics of the triple lock argue that increasing pension payments at the same rate for everyone can provide larger cash gains to people who are already relatively comfortable.
Supporters respond that the State Pension is a universal entitlement based on National Insurance contributions and that means-testing or selective reductions could create complicated incentives and undermine retirement security.
The debate therefore involves both questions of affordability and fairness.
Pension withdrawals are also rising
Tax uncertainty has already affected retirement planning.
Sky News reported in September that the amount withdrawn from pension pots for the first time had increased by 70% since 2023-24, reaching £91.2 billion in 2025-26 compared with £53.6 billion two years earlier.
Former pensions minister Steve Webb attributed part of the increase to uncertainty about government tax policy.
The introduction of inheritance tax rules affecting unused pension funds and death benefits from April 2027 has also influenced decisions by some savers.
That does not mean every withdrawal was caused by fear of higher taxes, but it demonstrates the wider effect that uncertainty can have on retirement planning.
Farage’s wider economic argument
Farage’s intervention fits into Reform UK’s broader argument that government should reduce spending before asking taxpayers for more money.
The party previously promised substantial tax cuts but Farage subsequently acknowledged that the UK’s fiscal position made immediate large-scale reductions difficult.
In November 2025, he said Reform would not borrow simply to fund tax cuts and that spending reductions would need to come first.
His position on pensioners follows a similar principle: Reform argues that reducing pensioner incomes should not be used as an easy route to balancing the books.
The party has instead focused heavily on welfare reform, immigration restrictions and reductions in government spending elsewhere.
The question of intergenerational fairness
One of the most difficult questions is whether Britain’s current system treats different generations fairly.
Older people have benefited from the triple lock, but younger workers face high housing costs, student debt, childcare expenses and uncertainty about future retirement provision.
At the same time, many pensioners have relatively modest incomes.
Any policy designed to reduce pension spending therefore risks affecting people with very different financial circumstances.
A universal pension increase may benefit wealthy pensioners as well as poorer ones, while a tax increase could potentially be designed to fall more heavily on people with additional sources of income.
This is why proposals to reform pensions often focus on targeting rather than simply increasing or reducing payments across the board.
What happens next?
The debate is likely to intensify ahead of the government’s Autumn Budget.
The Budget is scheduled for 28 October, and the Chancellor faces pressure to balance the government’s spending commitments against a difficult fiscal outlook.
For pensioners, several issues will be closely watched.
They include the final State Pension increase for 2027, the government’s mechanism for ensuring that people living solely on the State Pension do not pay income tax, the future of the triple lock and any changes to tax thresholds.
Farage has made clear that Reform intends to defend the triple lock and oppose measures that would place additional pressure on pensioners.
The government, meanwhile, has committed to protecting people whose only income is the State Pension from income tax during this Parliament, while facing broader pressure to raise revenue and control spending.
The central dispute is therefore not simply whether pensioners should pay “more tax”.
It is about how Britain should finance retirement in an ageing society, whether the triple lock remains sustainable, how tax thresholds should evolve and whether additional tax burdens should fall on pensioners, working-age households, wealthier savers or other groups.
For Farage and Reform, the message is straightforward: pensioners who have spent decades contributing to the system should not automatically be treated as the easiest source of additional revenue.
For critics of the current pension settlement, the question is whether Britain can maintain its existing guarantees without placing an increasing burden on younger taxpayers.
The coming Budget will provide another opportunity for those competing arguments to be tested against the government’s actual fiscal choices.