The full new state pension is set to exceed £13,000 per year next April, breaching the tax-free personal allowance for the first time.
The triple lock mechanism means the state pension increases by the highest out of wage growth, inflation or 2.5%.
The state pension is set to rise by 3.9% from April 2027, in line with the earnings growth element of the triple lock. This will likely be confirmed in chancellor John Healey’s Autumn Budget.
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If confirmed, the full new state pension would rise to £250.70 per week, or £13,036.40 a year.
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The first £12,570 of taxable income you get per year is tax-free thanks to the personal allowance, meaning many retirees who only received the state pension haven’t been taxed on it in the past.
State pension income will not be taxed if it's sole income, government says
If you had a taxable income of £13,036, you would usually owe around £91.48 in income tax.
However, the government said last year that pensioners will not need to pay tax if they only receive income from the state pension, even if it goes above the £12,570 personal allowance.
In the 2025 Autumn Budget, then-chancellor Rachel Reeves said: “We are ensuring that people only in receipt of the basic or new State Pension do not have to pay small amounts of tax through simple assessment from April 2027.”
She later added in an interview with broadcaster Martin Lewis in November 2025: “In this parliament, [people who only receive income from the state pension] won’t have to pay the tax, further out, I’m not going to be able to make any commitments on that, but we’re looking at a simple workaround at the moment.”
Although Reeves is no longer chancellor, pensions minister Torsten Bell confirmed the new government will stick to this pledge on 16 September.
He said: “In line with the commitment made at Budget 2025, pensioners who only just exceed the personal allowance will not have the administrative burden of paying small amounts of tax in this Parliament.
“The chancellor will set out further details on how that commitment will be delivered at the Budget.”
The government said the move will “ease the administrative burden for pensioners” and mean they do not have to “pay small amounts of tax via simple assessment”.
The system for this hasn’t been confirmed but more details may be released in the Autumn Budget.
Do you have to pay tax on other pension income?
If you have income from another source, perhaps from a workplace pension or part-time work, you will likely have to pay income tax.
Your pension provider usually calculates your tax and deducts it from your pension income through pay as you earn (PAYE), meaning any tax you owe will be automatically paid for you.
What is simple assessment, and will you have to pay tax on your state pension using it?
Simple assessment is a method used by HMRC to collect tax when a self-assessment tax return is not required but tax cannot be collected through PAYE.
It is used by HMRC to collect tax in some simple circumstances, including if you need to pay tax on your state pension.
Had the government not intervened, pensioners whose sole income is the UK state pension may have had to pay tax by simple assessment next year.
However, as the government has confirmed those who only get an income from the state pension will not need to pay small amounts of tax on it, you will likely not need to complete simple assessment.
