The full new state pension is projected to exceed £13,000 annually from April 2027, marking the first time it will breach the tax-free personal allowance. The state pension is set to increase by 3.9% from April 2027, in line with earnings growth under the triple lock mechanism. This would bring the full new state pension to £250.70 per week, or £13,036.40 a year.
The current tax-free personal allowance stands at £12,570 per year. While an income of £13,036 would typically incur around £91.48 in income tax, the government has confirmed that pensioners whose sole income is the state pension will not be required to pay tax, even if it exceeds this allowance.
This commitment was initially made by then-chancellor Rachel Reeves in the 2025 Autumn Budget and was recently reaffirmed by pensions minister Torsten Bell on 16 September. The government stated that this measure aims to ease the administrative burden for pensioners, preventing them from having to pay small amounts of tax via simple assessment. Further details on how this commitment will be delivered are expected in the upcoming Autumn Budget.