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 upcoming Budget, when the Chancellor is under pressure to close a public finance shortfall estimated at £20 billion. Resolution Foundation makes clear that headline income tax rates would remain unchanged for working‑age employees. The shift is from National Insurance paid by employees to income tax paid by a broader group. The measure would see more pensioners pay income tax since state pension income is approaching the income tax threshold due to the triple lock. Even small additional income above the personal allowance would lead to tax liability for retirees. Critics have warned that the measure risks inflaming inter‑generational tensions. Some argue pensioners as a group are being targeted unfairly despite often being portrayed as less burdened by inflationary cost pressures. Others say the proposals may complicate the tax system without delivering clarity or meaningful relief. Business organisations have also expressed concern. The British Retail Consortium warned that further tax rises risk feeding into rising business costs and food inflation, already projected to reach about six per cent. The Resolution Foundation has strong links to people now working in Government. Former leaders and staff of the think‑tank occupy influential roles in Treasury, the Office for Budget Responsibility and other economic policy institutions.

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