Resolution Foundation urges £6bn tax burden on pensioners via income tax shift

Mace | 23rd September 2025 | Lobbying, Politics

LONDON, ENGLAND - SEPTEMBER 9: Chancellor of the Exchequer Rachel Reeves attends a cabinet meeting at 10 Downing Street on September 9, 2025 in London, England. Keir Starmer re-shuffled his team of cabinet ministers late last week after the resignation of Housing Minister and Deputy Prime Minister, Angela Rayner. (Photo by Toby Melville - WPA Pool/Getty Images)

Labour‑aligned Resolution Foundation proposes shifting a 2p cut in employee National Insurance to income tax, targeting pensioners, landlords and self‑employed to raise £6bn. The plan aims to avoid raising income tax rates on employees but draws opposition over fairness, inter‑generational impact and inflation.

Labour’s favoured think‑tank Resolution Foundation has called on Chancellor Rachel Reeves to impose a £6 billion tax rise on pensioners, landlords and the self‑employed by shifting a cut in National Insurance contributions into income tax. The proposal would reduce employee National Insurance by 2 pence and offset that loss by increasing income tax obligations for those who do not currently pay employee National Insurance contributions. The change would affect pensioners who are already paying income tax, the self‑employed, and landlords. It is estimated around 8.7 million pensioners and 4.3 million self‑employed would be impacted. Resolution Foundation argues the measure forms part of a wider plan to raise more than £30 billion annually needed to restore the fiscal buffer that has been eroded. The think‑tank states that without measures, Britain’s public finances face increasing strain amid higher borrowing costs and concerns over national debt. The proposal is timed ahead of the upco...

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