Tax on Jersey pensions to be discussed by leaders

An informal debate will be held after a petition was signed by more than 5,000 people

States members in Jersey have agreed to discuss the issue of whether people should be charged tax on their old age pension.

A petition signed by more than 5,000 people claimed the tax was unfair in the context that pensioners would have paid tax on their lifetime earnings.

At the end of a States sitting on Wednesday, members agreed to hold a committee-style discussion about it, which could then result in a member bringing a proposition for debate.

Previously, ministers have dismissed the idea of abolishing the tax - claiming many pensioners would be exempt because of the income threshold.

They also said if pensions were untaxed, it would mean other groups such as young families would have to pay more in tax or social security.

But charities including Age UK and Independent Age have reported heightened concern among pensioners who fear being dragged into paying income tax.

Jersey has a tax threshold of £20,000 for single individuals and anyone with income below that does not pay any income tax.

The current full rate old-age pension is £271.81 per week, which is under the threshold as, based on that rate, it works out at a little over £14,000 across a year.

Ministers said the allowance was even higher for most married couples and civil partners at £32,000.

They said about half of pensioners did not pay any income tax, so making the States' old age pension exempt from tax would not benefit those pensioners with the lowest incomes.