STORY
The Government has promised that pensioners whose only income is the new state pension will not be required to pay income tax when the payment rises above the personal allowance. Downing Street confirmed the commitment after wage figures indicated that the triple lock could increase the full new state pension to approximately £13,036 from April 2027.
The standard personal allowance has been frozen at £12,570, meaning the full pension would otherwise exceed the point at which income tax becomes payable. The triple lock increases the state pension by the highest of earnings growth, inflation or 2.5 per cent. The relevant earnings measure currently suggests an increase of approximately 3.9 per cent, although the final figure has not yet been confirmed.
The protection will apply to pensioners with no income beyond the new state pension. People receiving occupational pensions, private pensions, investment returns or other taxable income may still face additional tax. The Government has not announced how the protection will operate, with the detailed mechanism expected to be included in a future Budget.