The State Pension rose by 4.8% on 6 April 2026 under the triple lock, taking the full new State Pension to £241.30 a week, or £12,547.60 a year. With the personal income tax allowance frozen at £12,570, retirees on the full new State Pension are now within £22 of the threshold at which income tax becomes payable.
For pensioners with any additional income, including from private or workplace pensions, savings interest, or rental income, the freeze means more of that income now falls into the basic rate band. This guide explains how the personal allowance freeze interacts with the State Pension in 2026/27, what it means in practical terms for different retirement income profiles, and what to check before April 2027.
The numbers for 2026/27
From 6 April 2026:
- Full new State Pension (for those reaching State Pension age on or after 6 April 2016): £241.30 per week, or £12,547.60 per year. Up from £230.25 per week in 2025/26.
- Full basic State Pension (for those who reached State Pension age before 6 April 2016): £184.90 per week, or £9,614.80 per year. Up from £176.45 per week in 2025/26.
- Personal income tax allowance: £12,570 per year. Frozen at this level until April 2031 according to HM Treasury and HMRC.
- Pension Credit Standard Minimum Guarantee: £238.00 per week for a single pensioner; £363.25 for a couple.
The figures above are drawn directly from the Department for Work and Pensions Benefits and Pensions Rates publication for 2026/27 and the HMRC Income Tax rates and allowances confirmation.
How the personal allowance freeze affects retirees
The personal allowance is the amount of income you can receive each tax year before any income tax is due. For 2026/27 it is £12,570 for most people. The Chancellor confirmed in the Autumn Budget that this allowance remains frozen until April 2031 rather than rising with inflation or earnings.
Three groups feel the freeze differently.
Group 1: Retirees on the full new State Pension only, no other income
Annual State Pension income of £12,547.60 sits £22.40 below the £12,570 allowance. No income tax is due. HM Revenue and Customs has confirmed that pensioners in this position do not need to file a tax return.
If the triple lock continues to deliver above-inflation rises in April 2027, the full new State Pension could exceed the personal allowance for the first time. The government has indicated it will address the administrative implications closer to the time.
Group 2: Retirees on the basic State Pension only
The full basic State Pension at £9,614.80 per year sits comfortably below the personal allowance, leaving around £2,955 of headroom for additional income before income tax becomes due. Many in this group also receive Additional State Pension (the old SERPS or S2P), which counts as taxable income alongside the basic State Pension.
Group 3: Retirees with private or workplace pension income
This is where the freeze bites hardest. Every pound of private pension income above the gap between your State Pension and £12,570 is taxed at the basic rate of 20%. As the State Pension rises each April under the triple lock, that gap narrows, pulling more private pension income into tax.
A retiree with the full new State Pension (£12,547.60) and a £10,000 private pension has total income of £22,547.60. They pay 20% income tax on £9,977.60 (the amount above £12,570), or £1,995.52 in tax for 2026/27.
How tax on State Pension is collected
The State Pension is paid before tax. HMRC collects any tax due either through the PAYE system on a private or workplace pension (by adjusting the tax code) or, for those without other PAYE income, through Simple Assessment, where HMRC sends an annual tax bill.
For most pensioners with a private pension, the practical outcome is that less is paid out by the private pension provider each month, since the tax code is reduced to claw back tax owed on State Pension income. The total tax due is the same; only the collection mechanism differs.
The Marriage Allowance: a quick check worth doing
If one partner earns less than £12,570 and the other is a basic-rate taxpayer earning between £12,570 and £50,270, the Marriage Allowance lets the lower-earning partner transfer £1,260 of their personal allowance to the higher-earning partner. This saves up to £252 in income tax per year.
For couples where one partner is on State Pension only and the other has additional income, this is often a missed saving. The claim is free and can be backdated up to four tax years. Full details and the application form are at gov.uk/marriage-allowance.
Pension Credit: still under-claimed
Pension Credit tops up weekly income to £238.00 for a single pensioner or £363.25 for a couple, and unlocks further support including help with housing costs, council tax reductions, and a free TV licence for those aged 75 and over. According to DWP estimates, around £2.2 billion of Pension Credit goes unclaimed each year.
The Pension Credit calculator on gov.uk is the quickest way to check eligibility. Many retirees who assume they earn too much to qualify are actually entitled to small amounts that unlock the wider package of benefits.
What to check before April 2027
- Check your tax code. If you have a private pension and a State Pension, your tax code should reflect the State Pension as untaxed income. Errors are common; the right code prevents both overpayment and unexpected bills.
- Apply for Marriage Allowance if eligible. Free at gov.uk, can be backdated to 2022/23.
- Run the Pension Credit calculator at gov.uk. Even small entitlements can unlock other benefits.
- Use ISAs for additional savings. Interest on cash ISAs is tax-free regardless of income, so the freeze on personal allowance does not bite. Annual allowance is £20,000 for 2026/27.
- Check whether deferring State Pension still makes sense for you. Deferral rules changed for those reaching State Pension age after April 2016 and now offer 1% extra for every nine weeks deferred (around 5.8% per year), which is materially less generous than the previous regime.
This article is for informational purposes only and does not constitute financial advice. Always verify rates with official sources and consider speaking to a qualified financial adviser before making decisions about mortgages, savings, or investments.
Frequently asked questions
Will I pay income tax on my State Pension?
The State Pension is taxable income. Whether you actually pay tax depends on your total income from all sources. If your only income is the full new State Pension (£12,547.60 in 2026/27), no tax is due because it sits below the £12,570 personal allowance.
How is tax on State Pension collected?
The State Pension is paid before tax. HMRC collects any tax due through the PAYE system on a private or workplace pension (by adjusting your tax code) or through Simple Assessment if you have no other PAYE income.
What is the Marriage Allowance and can I claim it?
If one partner earns under £12,570 and the other is a basic-rate taxpayer, the lower earner can transfer £1,260 of personal allowance to the higher earner, saving up to £252 a year. Apply free at gov.uk/marriage-allowance. Claims can be backdated four tax years.
How much is Pension Credit in 2026/27?
The Pension Credit Standard Minimum Guarantee tops weekly income up to £238.00 for a single pensioner or £363.25 for a couple. Around £2.2 billion goes unclaimed each year according to DWP estimates.
Will the personal allowance ever rise again?
HM Treasury has confirmed the personal allowance is frozen at £12,570 until April 2031. Any change before then would require a fiscal announcement.
What happens if my State Pension exceeds the personal allowance?
HMRC has indicated that pensioners with State Pension as their only income will not need to file tax returns even if the State Pension narrowly exceeds the personal allowance. The mechanism for collecting any tax due in that scenario will be set out closer to the time.
Sources and verification
- Department for Work and Pensions, Benefit and pension rates 2026/27
- HMRC, Income Tax rates and allowances 2026/27
- HM Treasury, personal allowance freeze and policy framework
- House of Commons Library, Benefits Uprating 2026/27 briefing CBP-10403
- Office for Budget Responsibility, triple lock cost projections
- gov.uk Marriage Allowance and Pension Credit guidance
