Will Your State Pension Be Taxed? The £12,570 Personal Allowance Problem
The full new State Pension is on course to rise 3.9% to £250.70 a week (£13,036.40 a year) in April 2027, which is £466.40 above the frozen £12,570 personal allowance. On paper that means about £93 of income tax. But the government has pledged that people whose only income is the full new or basic State Pension, without increments, will not pay income tax. How it will work is due in the 28 October 2026 Budget.
The short answer: yes on paper, probably not in practice for pension-only retirees
A full new State Pension of £13,036.40 a year will beat the £12,570 allowance by £466.40 in 2027/28, a notional tax bill of £93.28. Ministers have repeatedly promised that people whose only income is the full new or basic State Pension, without increments, will not pay it. Anyone with other income already pays, and will pay slightly more.
Two numbers collide in April 2027. The triple lock is lifting the State Pension by 3.9%, the rate of earnings growth in May to July 2026. Meanwhile the personal allowance, the income you can receive tax-free, has been stuck at £12,570 since 2021/22 and is frozen until April 2031.
For the 2026/27 tax year the full new State Pension (£241.30 a week, or £12,547.60 over 52 weeks) sat just £22.40 under the allowance. In 2027/28 it will sit £466.40 over it. That is the first time the full new State Pension has exceeded the allowance since the new system began in April 2016.
The headline risk is smaller than it sounds. Tax at 20% on £466.40 is £93.28 a year, or about £7.77 a month. And the government says people living only on the full new or basic State Pension will not pay it, although HMRC has not yet explained the mechanism. The details are expected in the Budget on Wednesday 28 October 2026.
State Pension tax calculator 2027/28
Enter your weekly State Pension and any other taxable income such as a workplace or private pension. We show your annual State Pension, how much of your income is taxable and the income tax due a year and a month, using 2027/28 rates as known on 23 October 2026. It does not apply the promised exemption for State-Pension-only pensioners because the rules have not been published yet.
- Annual State Pension
- £13,036.40
- Total income
- £13,036.40
- Above personal allowance by
- £466.40
- Taxable amount
- £466.40
- Income tax a year
- £93.28
- Income tax a month
- £7.77
Ministers have pledged that people whose only income is the full new or basic State Pension (without increments) will not pay income tax in this Parliament. How this works is due at the 28 October 2026 Budget, so this amount may not be collected.
England, Wales and Northern Ireland rates. Scottish bands differ; savings/dividend allowances and Marriage Allowance are not modelled. Not tax advice.
How does the triple lock set the April 2027 State Pension rise?
The triple lock raises the State Pension each April by the highest of earnings growth, CPI inflation or 2.5%. For April 2027 earnings won: ONS total pay growth was 3.9% for May to July 2026, beating September CPI of 3.5% and the 2.5% floor.
The triple lock compares three numbers. The first is average earnings growth for May to July, published by the ONS in September. The second is CPI inflation for September, published in October. The third is a fixed floor of 2.5%. The State Pension rises by whichever is highest.
On 15 September 2026 the ONS reported whole-economy total pay growth of 3.9% for May to July 2026, with regular pay (excluding bonuses) up 3.5%. On 21 October 2026 the ONS reported CPI of 3.5% for September, up from 3.1% in August, driven mainly by motor fuels. Earnings (3.9%) therefore set the rise. Interestingly, if the regular pay measure were used instead, it would have tied with CPI at 3.5%.
Triple lock inputs for April 2027 (%)
Source: ONS Average weekly earnings (15 Sep 2026); ONS Consumer price inflation (21 Oct 2026)View the data
| Label | Value |
|---|---|
| Total pay growth, May–Jul 2026 | 3.9% |
| Regular pay growth, May–Jul 2026 | 3.5% |
| CPI inflation, Sep 2026 | 3.5% |
| Triple lock floor | 2.5% |
Earnings have since cooled. The ONS bulletin of 20 October 2026 shows total and regular pay both growing 3.7% in June to August 2026. That does not change the April 2027 rise, because the triple lock uses the May to July window.
How much will the State Pension be in 2027/28?
The full new State Pension is on course for £250.70 a week (£13,036.40 a year) and the full basic State Pension for £192.10 a week (£9,989.20 a year) from April 2027. Both are 3.9% rises, to be formally confirmed at the Budget.
| 2026/27 weekly | 2027/28 weekly (on course) | 2026/27 annual | 2027/28 annual | vs £12,570 allowance in 2027/28 | |
|---|---|---|---|---|---|
| Full new State Pension (reached SPA from 6 April 2016) | £241.30 | £250.70 | £12,547.60 | £13,036.40 | £466.40 above |
| Full basic State Pension (reached SPA before 6 April 2016) | £184.90 | £192.10 | £9,614.80 | £9,989.20 | £2,580.80 below |
The 2027/28 weekly figures come from ITV/PA reporting on 21 October 2026 and AJ Bell analysis on 15 September 2026, both applying 3.9% to the current rates. Our own check: £241.30 × 1.039 = £250.71, and £184.90 × 1.039 = £192.11, consistent with rounding to £250.70 and £192.10.
Annual figures here use 52 weeks, the convention used by AJ Bell and interactive investor. The State Pension is paid every four weeks, so in a given tax year the amount you actually receive can differ slightly, and your own amount depends on your National Insurance record.
Even the lowest outcome would have crossed the line. At the 2.5% floor the full new State Pension would have been £247.33 a week, or £12,861.16 a year, still £291.16 above the allowance (KalQLater calculation).
How did the State Pension catch up with the personal allowance?
In 2016/17 the full new State Pension was worth 73.6% of the personal allowance, leaving £2,906 of headroom; by 2027/28 it will be worth 103.7% of it. The squeeze came from big triple lock rises in 2023 and 2024 while the allowance stayed frozen at £12,570.
Full new State Pension, annual (£), 2016/17–2027/28
Source: Royal London new State Pension rate history; ITV/PA 21 Oct 2026; KalQLater calculation (weekly × 52)View the data
| Label | Value |
|---|---|
| 2016/17 | £8,094 |
| 2017/18 | £8,297 |
| 2018/19 | £8,546 |
| 2019/20 | £8,767 |
| 2020/21 | £9,110 |
| 2021/22 | £9,339 |
| 2022/23 | £9,628 |
| 2023/24 | £10,600 |
| 2024/25 | £11,502 |
| 2025/26 | £11,973 |
| 2026/27 | £12,548 |
| 2027/28 (on course) | £13,036 |
Personal allowance minus full new State Pension (£ headroom)
Source: KalQLater calculation from Royal London rate history, GOV.UK and uknetpay personal allowance historyView the data
| Label | Value |
|---|---|
| 2016/17 | £2,906 |
| 2017/18 | £3,203 |
| 2018/19 | £3,304 |
| 2019/20 | £3,733 |
| 2020/21 | £3,390 |
| 2021/22 | £3,231 |
| 2022/23 | £2,942 |
| 2023/24 | £1,970 |
| 2024/25 | £1,068 |
| 2025/26 | £597 |
| 2026/27 | £22 |
| 2027/28 (on course) | £-466 |
The turning point was April 2023, when the triple lock delivered 10.1% (from £185.15 to £203.85 a week) on the back of high inflation, followed by 8.5% in April 2024. Those two rises alone added almost £1,900 a year to the full new State Pension, while the allowance did not move.
The old basic State Pension is a different story. At £9,989.20 a year in 2027/28 it will still be £2,580.80 below the allowance, so someone on the full basic rate with no other income has no tax problem yet.
How long is the £12,570 personal allowance frozen?
The £12,570 personal allowance is frozen until 5 April 2031. The freeze began in April 2021 and was extended by three years in the November 2025 Budget, so 2030/31 is the last frozen year under current law.
GOV.UK lists the 2026/27 bands as: personal allowance £12,570; basic rate 20% on £12,571 to £50,270; higher rate 40% on £50,271 to £125,140; additional rate 45% above £125,140. The allowance is reduced by £1 for every £2 of income above £100,000.
The House of Commons Library briefing on taxation of the State Pension (22 September 2026) confirms the November 2025 Budget kept the personal allowance and higher rate threshold frozen until April 2031. It cites an OBR estimate that the freezes will bring 5.98 million additional people into income tax by 2029/30.
If the triple lock keeps running, the overshoot grows each year. LCP estimated in May 2026 that a person relying on the new State Pension would face notional tax of about £88 in 2027/28, £153 in 2028/29 and £220 in 2029/30. Its 2027/28 estimate was made before the 3.9% figure was known; on the actual figure we calculate £93.28.
Has the government promised State Pension-only pensioners won't pay tax?
Yes. Since the November 2025 Budget, ministers have repeatedly said people whose only income is the full new or basic State Pension, without increments, will not pay income tax this Parliament. What is missing is the mechanism, which HMRC says will be set out in the 28 October 2026 Budget.
The House of Commons Library has tracked the statements. In short, the pledge has been repeated by three Treasury ministers and two senior HMRC officials, but no legal text or operating rules had been published as of its September 2026 briefing.
- 26 November 2025, Budget (Rachel Reeves, then Chancellor) Pensioners whose only income is the basic or new State Pension would stop facing small tax bills through Simple Assessment from April 2027. The government was 'exploring the best way to achieve this'.
- 12 January 2026 (Dan Tomlinson, Exchequer Secretary) Such pensioners 'will not have to pay income tax over this Parliament'.
- 13 January 2026 (HMRC's Cerys McDonald) Simple Assessment is currently HMRC's only way to collect tax from State-Pension-only pensioners who do not file a return; the change was expected in the autumn Finance Bill, for delivery from April 2027.
- 15 June 2026 (Torsten Bell, Treasury minister) Reaffirmed removing Simple Assessment bills from 2027/28, with the change in the Finance Bill after the next Budget.
- 9 September 2026 (HMRC's Jonathan Athow) Arrangements will be set out in the Budget; 'There are a number of ways in which you could do this.'
A government spokesperson quoted by ITV on 21 October 2026 said ministers are 'committed to the triple lock for the rest of this Parliament', and that people who rely wholly on the new State Pension, or the old basic pension with no increments, will not pay tax on it.
What are the 'Labour triple lock pension changes' everyone is searching for?
Prime Minister Andy Burnham told Labour's conference on 30 September 2026 that the triple lock would be adjusted from April 2030, after this Parliament. It is a stated plan, not law. The April 2027 rise is unaffected.
According to ITV's report of the speech, the State Pension would still rise each year by at least prices or 2.5%, but would 'hold value relative to earnings over time' rather than taking the full annual earnings figure. Savings would go towards a National Care Service.
Interactive investor describes the change as measuring the earnings element over a period rather than each year, to remove the 'ratchet' where an inflation spike is followed by a catch-up earnings rise. It reports government forecasts of about £15 billion saved by the end of the 2030s and about £50 billion by the 2050s, and IFS modelling that the pension would have risen about 75% since 2011 under the adjusted lock, versus 89% under the current one. Opposition parties have pledged to keep the current system, so the change may never happen.
- 3.9% earnings figure and 3.5% CPI (ONS)
- Personal allowance frozen to April 2031
- Pledge: no income tax for full new/basic State-Pension-only pensioners this Parliament
- Triple lock kept until the end of this Parliament; adjustment planned from April 2030
- Budget on Wednesday 28 October 2026
- A rise in the personal allowance, or a State Pension income tax exemption written into law
- Exactly how HMRC will switch off small tax bills (tax code, write-off or exemption)
- Whether people with increments, deferred pension or SERPS will be covered
- Changes to pension tax-free cash, which pensions minister Torsten Bell has criticised as press speculation
- Detail of the post-2030 earnings formula
How much tax will you pay on your State Pension in 2027/28?
On a full new State Pension alone, notional tax is £93.28 a year (likely waived under the pledge). Add a £5,000 private pension and the bill is £1,093.28; add £10,000 and it is £2,093.28. Pensioners with other income already pay tax, and each pays about £98 more in 2027/28.
| Income | Total income 2027/28 | Taxable 2027/28 | Tax 2027/28 | Tax a month | Tax 2026/27 | Change |
|---|---|---|---|---|---|---|
| Full new State Pension only | £13,036.40 | £466.40 | £93.28 (pledged to be waived) | £7.77 | £0 | +£93.28 |
| Full new State Pension + £5,000 private pension | £18,036.40 | £5,466.40 | £1,093.28 | £91.11 | £995.52 | +£97.76 |
| Full new State Pension + £10,000 private pension | £23,036.40 | £10,466.40 | £2,093.28 | £174.44 | £1,995.52 | +£97.76 |
| Full basic State Pension only | £9,989.20 | £0 | £0 | £0 | £0 | £0 |
The arithmetic is simple. Add your annual State Pension to your other taxable income, subtract £12,570, and charge 20% on the rest up to £50,270. For example, £13,036.40 + £5,000 = £18,036.40; minus £12,570 = £5,466.40; × 20% = £1,093.28.
Note the 'Change' column. For someone with a private pension, the £93.28 is not new: they were already over the allowance, so the 3.9% rise itself (£488.80 a year) is taxed at 20%, costing £97.76. Their net gain from the rise is still £391.04.
How many pensioners pay income tax?
HMRC forecasts quoted by the House of Commons Library show 9.58 million people of State Pension age paying income tax in 2026/27, up from 6.47 million in 2020/21, a 48% rise. Most of them have private or workplace pensions on top of the State Pension.
| Group | 2020/21 | 2026/27 (forecast) | Change |
|---|---|---|---|
| All income taxpayers | 31.7m | 40.8m | +9.1m (+28.7%) |
| Taxpayers of State Pension age | 6.47m | 9.58m | +3.11m (+48.1%) |
| State-Pension-only pensioners (HMRC ballpark) | n/a | 0.8m to 1m | Pledged exemption group |
Pensioner taxpayers grew far faster than taxpayers overall. That is the frozen allowance at work: the State Pension has risen by triple lock amounts every year while the tax-free threshold has not, so more retirement income spills into tax. Percentage changes are KalQLater calculations from the Commons Library figures.
What should you do before April 2027?
Check your State Pension forecast, look at the tax code on any other pension, and wait for the 28 October Budget before acting. If your only income is the full new or basic State Pension, the pledge says you will not pay tax; if you have other income, budget for about £98 a year more tax.
- 1Find your exact State Pension
Your amount depends on your National Insurance record and may include extra amounts. Check your State Pension statement or forecast on GOV.UK rather than assuming the full rate.
- 2Work out whether you are 'State Pension only'
List every taxable income: workplace or private pensions, part-time earnings, rental profit, savings interest above your allowances. If any exist, the pledged exemption is unlikely to apply to you.
- 3Check your tax code from April 2027
If you have a private or workplace pension, HMRC will normally adjust its tax code to collect tax on your State Pension. Your new code notice should reflect £250.70 a week (subject to confirmation).
- 4Watch the Budget on 28 October 2026
It should confirm the 2027/28 rates and explain how small tax bills for State-Pension-only pensioners will be removed, including whether increments or deferred pension count.
- 5Do not ignore an HMRC letter
If you receive a Simple Assessment or P800, check it against your income. You can query it with HMRC, and Time to Pay is available for bills you cannot pay in one go.
- 6Use the calculator above
Enter your weekly pension and other income to see your annual and monthly tax under current 2027/28 rules.
Claims vs evidence
“The full new State Pension is set to top £13,000.”
3.9% on £241.30 gives £250.70 a week, or £13,036.40 over 52 weeks. The rate is not formally confirmed until the Budget, but the inputs are published.
True“The State Pension will rise 3.9% because of inflation.”
September 2026 CPI was 3.5%. The 3.9% comes from ONS total pay growth in May to July 2026.
False“Pensioners will be taxed on their State Pension from April 2027.”
A full new State Pension will exceed the allowance by £466.40, but ministers have pledged no income tax for full new/basic State-Pension-only pensioners. Those with other income already pay tax.
Misleading“Labour is scrapping the triple lock.”
Burnham announced an adjustment from April 2030, keeping the CPI and 2.5% guarantees and changing how earnings are counted. It is a plan, not legislation, and does not affect April 2027.
Misleading“Everyone living on the State Pension is protected from tax.”
The pledge covers the full new or basic State Pension 'without increments'. People with deferred pension, protected payments or other income may not be covered.
Partly true“The Budget will raise the personal allowance.”
Only speculation as of 23 October 2026. Current law freezes it at £12,570 until April 2031.
Too earlyFrequently asked questions
Will the State Pension be taxed in 2027?
The full new State Pension will be £13,036.40 a year in 2027/28 (on course), £466.40 above the £12,570 personal allowance. In theory that is £93.28 tax. The government has pledged that people whose only income is the full new or basic State Pension, without increments, will not pay income tax; details are due at the 28 October 2026 Budget.
How much will the State Pension be from April 2027?
The full new State Pension is on course for £250.70 a week and the full basic State Pension for £192.10 a week, both up 3.9% under the triple lock. Over 52 weeks that is £13,036.40 and £9,989.20. The rates are expected to be formally confirmed at the Budget.
Why is the State Pension rising by 3.9%?
The triple lock uses the highest of earnings growth, CPI inflation or 2.5%. ONS total pay growth for May to July 2026 was 3.9%, higher than September 2026 CPI of 3.5% and the 2.5% floor, so earnings set the April 2027 rise.
How long is the personal allowance frozen?
The personal allowance has been £12,570 since 2021/22 and is frozen until 5 April 2031 after the November 2025 Budget extended the freeze by three years. Any change would need a new announcement, and none had been confirmed as of 23 October 2026.
How does HMRC collect tax on the State Pension?
The State Pension is paid without tax deducted. If you have another pension or a job, HMRC changes that income's tax code to collect the tax. If not, HMRC issues a Simple Assessment after the tax year ends, payable by 31 January. Ministers plan to stop Simple Assessment bills for State-Pension-only pensioners from 2027/28.
Do I pay tax on my State Pension if I have a private pension?
Yes, if your total income exceeds £12,570. With a full new State Pension of £13,036.40 and a £5,000 private pension in 2027/28, tax would be £1,093.28 a year (about £91 a month), usually taken from your private pension through your tax code.
Is Labour scrapping the triple lock?
Not for this Parliament. Prime Minister Andy Burnham announced on 30 September 2026 that the triple lock would be adjusted from April 2030, with pensions still rising by at least prices or 2.5% but tracking earnings over time rather than each year. It is a plan, not law.
Will the basic State Pension be taxed?
Not on its own. The full basic State Pension for people who reached State Pension age before April 2016 is on course for £192.10 a week, or £9,989.20 a year in 2027/28, which is £2,580.80 below the £12,570 personal allowance.
How we built this analysis
- Triple lock: compared ONS whole-economy total pay growth for May to July 2026 (3.9%, released 15 September 2026), ONS CPI for September 2026 (3.5%, released 21 October 2026) and the 2.5% floor; the highest, 3.9%, applies. 2027/28 weekly rates (£250.70 new, £192.10 basic) are as reported by ITV/PA and AJ Bell; our check: £241.30 × 1.039 = £250.71 and £184.90 × 1.039 = £192.11.
- Annual amounts = weekly rate × 52 (e.g. £250.70 × 52 = £13,036.40), the convention used by AJ Bell and interactive investor. Actual receipts in a tax year depend on four-weekly payment dates.
- Allowance gap = personal allowance minus annual full new State Pension for each year 2016/17 to 2027/28, using Royal London's rate history and personal allowances of £11,000, £11,500, £11,850, £12,500 (two years) and £12,570 (2021/22 onward). 2027/28: £12,570 − £13,036.40 = −£466.40.
- Tax examples: (State Pension + other income − £12,570) × 20%, all within the basic rate band (to £50,270). E.g. (£13,036.40 + £10,000 − £12,570) × 0.2 = £2,093.28; monthly = annual ÷ 12. Year-on-year change for taxpayers already over the allowance = (£13,036.40 − £12,547.60) × 0.2 = £97.76.
- Pensioner taxpayer change: (9.58m − 6.47m) ÷ 6.47m = 48.1%; all taxpayers (40.8m − 31.7m) ÷ 31.7m = 28.7%. 2026/27 figures are HMRC forecasts quoted by the House of Commons Library.
- Floor scenario: £241.30 × 1.025 = £247.33 a week; × 52 = £12,861.16, £291.16 above the allowance.
Limitations
The 2027/28 State Pension rates are on course but not formally confirmed until the 28 October 2026 Budget, and the mechanism for exempting State-Pension-only pensioners has not been published, so who exactly qualifies is unknown. Our examples assume the full State Pension, no other allowances (such as the Marriage Allowance or Blind Person's Allowance), no savings or dividend income and residence in England, Wales or Northern Ireland; Scotland has different income tax bands above the personal allowance. Individual State Pension amounts vary with National Insurance records. Figures are as of 23 October 2026. This is general information, not financial or tax advice.
Spotted an error? See our corrections policy. Read how we work in our methodology and editorial standards.
Sources
- Office for National StatisticsAverage weekly earnings in Great Britain: September 2026Total pay 3.9%, regular pay 3.5%, May–July 2026 (15 Sep 2026)
- Office for National StatisticsConsumer price inflation, UK: September 2026CPI 3.5% in September 2026, 3.1% in August (21 Oct 2026)
- Office for National StatisticsAverage weekly earnings in Great Britain: October 2026Pay growth 3.7%, June–August 2026
- House of Commons LibraryTaxation of state pension (CBP 10250), 22 September 2026Ministerial statements, freeze to April 2031, pensioner taxpayer numbers, OBR estimate, Budget date
- GOV.UKIncome Tax rates and Personal Allowances2026/27 allowance £12,570 and tax bands
- ITV NewsAndy Burnham sets out plans to end triple lock from 2030 to pay for social careConference speech on adjusting the triple lock from April 2030
- GOV.UK / HM TreasuryIncome Tax: Personal Allowance and basic rate limit from 2019-20Allowance £11,850 (2018/19) and £12,500 (2019/20, 2020/21)
- Royal London (adviser technical centre)New State Pension ratesWeekly rates 2016/17–2026/27
- Royal London (adviser technical centre)Basic State Pension ratesWeekly rates 2016/17–2026/27
- uknetpayUK Personal Allowance changes and freeze historyAllowance by year, 2016/17 £11,000 and 2017/18 £11,500
- Low Incomes Tax Reform Group (CIOT)How is tax collected on the state pension?PAYE tax codes, Simple Assessment, deadlines
- LCPThe tax treatment of state pensioners (Steve Webb, Alasdair Mayes), 18 May 2026Notional tax £88/£153/£220; 13.2m recipients, fewer than 1m covered
- Institute for Fiscal StudiesWhat are the effects of the triple lock and how could it be reformed?How the triple lock works and its cost
- ITV News / PAFull new state pension set to top £13,000 under triple lock guarantee (21 Oct 2026)£250.70 and £192.10 weekly; government spokesperson
- interactive investorThree state pension announcements to expect at the Budget (22 Oct 2026)Budget expectations; CPI-only uprating of extras; 2030 triple lock change