Warning against overtaxing pensioners: The hidden squeeze on retirement living standards

The revelation that nearly every second pensioner must now pay tax should alarm policymakers, as it represents a hidden tax increase on a group with limited ability to earn more. While the tax reforms were phased in, the allowance has not kept up with pension increases, effectively raising taxes without a legislative vote. Even modest pensions now face tax bills, reducing disposable income for essentials like healthcare and heating. The system ignores that pensioners are on fixed incomes and cannot easily adjust to higher costs. Particularly hard hit are pensioners in cities with higher living costs and those without private savings. Unless the tax-free allowance is indexed to inflation, the burden will worsen, potentially increasing old-age poverty.