Why this matters from April 2027
The tax-free personal allowance is frozen at £12,570 until 2031. The full new State Pension is expected to rise by 3.9% in April 2027, to £250.70 a week, about £13,036 a year. For the first time, the full State Pension on its own would be over the tax-free allowance.
| Full new State Pension now | £241.30 a week (£12,548 a year) |
|---|---|
| Expected from April 2027 | £250.70 a week (£13,036 a year) |
| Full basic State Pension from April 2027 | £192.10 a week, still under the allowance |
| Tax-free allowance | £12,570, frozen until April 2031 |
The government’s promise
The government has said people whose only income is the State Pension won’t pay income tax on it. It says the Budget on 28 October 2026 will confirm how this will work. We’ll update this page the same day.
The promise doesn’t cover people with any other income, such as a small work pension or savings interest over the tax-free amounts. Most pensioners have some other income, so most will pay a little more tax from April 2027.
Why the tax on my work pension looks so high
Your State Pension is paid without any tax taken off. It uses up most of your tax-free allowance, so HMRC collects the tax on your State Pension through the tax code on your work or private pension. That’s normal, but it’s worth checking the tax code is right.
Common reasons for paying too much: an emergency tax code after you start a new pension or take a lump sum, or HMRC using an out-of-date State Pension amount.
Worked example
Brian gets the full new State Pension and a £6,000 a year pension from his old job.
| This year: £12,548 + £6,000 − £12,570 allowance = £5,978 × 20% | £1,196 tax |
|---|---|
| From April 2027: £13,036 + £6,000 − £12,570 = £6,466 × 20% | £1,293 tax |
| All taken from his work pension, about | £108 a month from April 2027 |
Questions
Do I have to fill in a tax return?
Usually not. If you have a work or private pension, the tax comes off it automatically. If HMRC can’t collect it that way, it sends you a calculation called Simple Assessment to pay.
I put off claiming my State Pension and get extra. Am I covered by the promise?
The promise is about the standard State Pension. If you get more than the full rate, for example from putting off your claim, you may pay a little tax on the part above the allowance.
I live in Scotland.
The tax-free allowance is the same, but Scottish tax rates are different, so your tax will be close to our figure but not exact.