Does your state pension come with taxes?

More pensioners are being pulled into the tax system as a result of increases to the UK state pension and a continuous freeze on income tax thresholds

Next April, the entire new state pension is expected to surpass 13,000 annually, surpassing the tax-free personal allowance for the first time.

Because of the triple lock mechanism, the state pension increases by the maximum of two and a half percent, inflation, or wage growth.

According to the triple lock's earnings growth component, the state pension is scheduled to increase by 3.9 percent starting in April 2027. Chancellor John Healy's Autumn Budget will probably confirm this.

The entire new state pension would increase to 250.70 per week, or 13,036.40 annually, if confirmed.

Watch the entire video here: The personal allowance makes the first 12,570 of your annual taxable income tax-free, so many retirees who only received the state pension were previously exempt from paying taxes on it.

The government claims that if a state pension is the only source of income, it won't be taxed.

You would typically owe approximately 91.48 in income tax if your taxable income was 13,036.

However, the government announced last year that pensioners who only receive income from the state pensioneven if it exceeds the 12,570 personal allowancewill not be required to pay taxes.

"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 starting in April 2027," stated then-chancellor Rachel Reeves in the 2025 Autumn Budget."

"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," she later stated in a November 2025 interview with broadcaster Martin Lewis."

On September 16, pensions minister Torsten Bell affirmed that the new government will uphold this commitment even though Reeves is no longer chancellor.

"Pensioners who barely exceed the personal allowance will not have the administrative burden of paying small amounts of tax in this Parliament, in accordance with the commitment made at Budget 2025," he stated.

"At the budget, the chancellor will provide more information about how that commitment will be carried out."

According to the government, the action will "ease the administrative burden for pensioners" and eliminate the need for them to "pay small amounts of tax via simple assessment."

Although the system for this has not been verified, the Autumn Budget may contain more information.

Does your other pension income have to be taxed?

You will probably have to pay income tax if you have other sources of income, such as a pension from your job or part-time employment.

Pay as you earn (PAYE), which means that any taxes you owe will be automatically paid for, is how your pension provider typically computes your tax and subtracts it from your pension income.

Will you be required to pay taxes on your state pension using simple assessment?

When a self-assessment tax return is not necessary but tax cannot be collected through PAYE, HMRC uses simple assessment to collect taxes.

In certain straightforward situations, such as when you have to pay tax on your state pension, HMRC uses it to collect taxes.

Pensioners whose only source of income is the UK state pension might have had to pay tax by simple assessment the following year if the government hadn't stepped in.

However, you probably won't have to complete a simple assessment because the government has confirmed that people who only receive income from the state pension won't be required to pay small amounts of tax on it.