More state pensioners risk tax bills from HMRC as the Department for Work and Pensions (DWP) state pension triple lock continues to push incomes higher, even before the planned adjustment to the policy from 2030. The Labour Party government leader has spelled out plans to alter the pledge, but frozen tax thresholds mean the tax system now reaches further into pensioners' incomes each year.
The personal allowance remains frozen at £12,570 until 2031. As a result, each rise in the State Pension increases the likelihood that more pensioners will be drawn into paying income tax for the first time.
Triple lock rise expected next April
Under the current system, the State Pension is expected to rise next April in line with earnings growth, which stood at 3.9% in May–July 2026. This figure is likely to be higher than September's inflation number, due to be released in October. A 3.9% increase would take the full new State Pension from £241.30 to around £250.70 a week, or approximately £13,037 a year.
That would put the full new State Pension around £467 above the current frozen tax-free £12,570 Personal Allowance. Further hikes are expected in 2028-29 and 2029-30, before the triple lock is adjusted, meaning more pensioners will cross the threshold and face a tax burden.
Political warnings over frozen threshold
Alison Griffiths, speaking for the Conservative Party, warned that many pensioners “see their state pension increase on paper, only to find more of it being taken by the taxman.” Charlie Maynard, the Liberal Democrat Treasury spokesperson, described the personal allowance freeze as a “stealth” tax increase, arguing that it “will hit some of the lowest-paid and most vulnerable the hardest”. He noted that “the state pension is nearly equal to the threshold… it is an absolutely tiny gap”.
BBC and ITV star Martin Lewis said: “The State Pension isn't tax-free, it's taxable income. It's just that by itself, for most, it has long been less than the personal allowance (the amount most can earn tax-free a year). Yet as the State Pension's risen and the allowance is frozen at £12,570 a year, the full new State Pension is just £22 less than the allowance.”
Lewis highlights government pledge
Lewis added: “And as, from April 2027, the State Pension is due to rise 3.9% under the triple lock, the full new State Pension alone will be over the tax-free allowance. Last year, the then Chancellor Rachel Reeves promised me you wouldn't pay tax from then if the State Pension was your only income, and recently the Treasury said it'd keep that pledge.”
The Treasury has said it would keep that pledge, but with the personal allowance frozen until 2031 and further triple lock increases planned before the 2030 adjustment, the gap between pension income and the tax threshold is set to widen, potentially drawing more pensioners into tax liabilities in the interim.
