Exclusive: The chancellor will use his budget this week to protect pensioners and those saving for their retirement as he announces plans to shield nearly one million people from paying income tax John Healey is expected to confirm on Wednesday that the full state pension will rise by £489 to £13,036 - equivalent to 3.9% However, the rise will push about one million people on low incomes who rely on the state pension above the £12,570 personal allowance threshold, meaning they would be dragged into paying income tax To retain the principle that the state pension is not taxable, Healey is expected to announce a rise in the tax-free allowance for low-income pensioners to £13,036. The move will cost taxpayers £200m a year by 2030 It will rise in line with increases in the state pension over the course of this parliament. However, millions of pensioners with higher incomes - such as those who have private pensions - will still pay income tax The Times has also been told that the chancellor has decided not to reduce the tax-free pension lump sum. Pension savers can take 25 per cent of their pension tax-free from the age of 55 up to a maximum of £268,275 There were suggestions that Healey could reduce the tax-free amount to £100,000, but he has chosen to retain the current level The moves to protect pensioners and those saving for their retirement come after Andy Burnham announced plans to end the pensions triple lock - under which the state pension rises in line with inflation, wages or 2.5 per cent - in 2030 to help fund social care thetimes.com/article/47291ec…