The Government has pledged to make the tax system simpler for pensioners whose only income comes from the state pension
Rachel Reeves has been warned that ministers cannot "act surprised" if pensioners question the fairness of being dragged into paying more tax in retirement.
The criticism comes amid forecasts that an extra one million pensioners will be brought into the income tax system by 2030-31 as frozen tax thresholds continue to bite.
The Chancellor has come under fire over the Government's decision to keep income tax thresholds frozen until 2031, a move critics have branded a "stealth tax" on older people.
Forecasts from the Office for Budget Responsibility, published alongside the Spring Statement, suggest an additional one million pensioners will be brought into paying income tax over the next four years as a result of the threshold freeze.
The OBR estimates that 600,000 extra state pension recipients will become liable for income tax by 2026-27, with that figure rising to one million by 2030-31.
The issue was debated in Parliament on Monday following a petition that attracted 119,206 signatures before closing on April 1.
The petition called for the introduction of a new tax code that would double the £12,570 Personal Allowance for state pensioners amid concerns that more retirees are being drawn into the tax system as the state pension rises.
During the debate, Conservative MP Alison Griffiths said pensioners could clearly see the impact of the policy without needing ministers to explain it.
She told MPs: "The Government regularly tell people that they have not increased income tax rates. However, pensioners, who are a savvy bunch, can see exactly what is happening.
"They do not need a Treasury briefing to understand where more of their income is being taxed each year."
Ms Griffiths also criticised the decision to extend the Personal Allowance freeze.
She said: "The Chancellor chose to extend the freeze in the personal allowance until 2031. That was a political choice.
"Ministers cannot make that decision and then act surprised when pensioners ask questions about fairness."
"The Chancellor chose to extend the freeze in the personal allowance until 2031. That was a political choice," Ms Griffiths said during the debate. "It means that more pensioners will continue to be drawn into the tax system year after year.
The MP expressed particular concern about ongoing uncertainty, noting that while last year's Budget promised pensioners relying solely on state pension income would avoid dealing with small tax bills through Simple Assessment from 2027, her constituents remain unclear about eligibility criteria and how the system will operate.
Liberal Democrat MP Charlie Maynard condemned the threshold freeze as "both wrong and unfair," arguing the government had implemented a stealth tax that would disproportionately affect the lowest paid and most vulnerable.
"An estimated 600,000 people were dragged into paying income tax for the first time this April and a further 580,000 were pulled into the higher 40p rate," Mr Maynard told MPs, describing such measures as "dishonest with voters" and an inadequate method of addressing economic challenges.
He urged ministers to abandon stealth tax policies at a time when cost of living pressures are affecting people across all life stages.
Conservative MP John Lamont challenged the perception that pensioners are universally wealthy, stating that while this may apply to a small minority, it does not reflect reality for most.
The Treasury defended its approach, with a spokesperson stating: "Anyone whose only income is the full new or basic State Pension without any increments will not pay income tax and we are committed to that over this Parliament."
The spokesperson highlighted that 12 million pensioners would see their income increase by up to £470 this year through the Triple Lock, while continuing to benefit from the highest Personal Allowance among G7 nations.
The Government has pledged to reduce administrative burdens for pensioners whose sole income is the basic or new state pension, ensuring they will not face small tax demands through Simple Assessment from 2027-28 should the state pension exceed the Personal Allowance threshold.
Ministers are currently exploring how best to implement this change and have committed to providing further details next year.

