What’s changed: Updated 1 October 2026: the triple lock applies in its current form to April 2029, and the government plans to adjust it from April 2030. Full update history.
Educational, not advice. This article explains how the State Pension, the personal allowance and the government’s 2027 promise fit together. It is general information, not personal financial or tax advice. Savvy Investor Guide is not authorised or regulated by the Financial Conduct Authority. Nothing here tells you what to do about your own tax or pension.
On 15 September the Office for National Statistics published its earnings figures for May to July 2026. Total pay grew 3.9% over the year.
That figure is one of the three inputs to the State Pension triple lock, and on current form it is the one that wins. Apply 3.9% to the full new State Pension and the weekly rate goes from £241.30 to roughly £250.70 from April 2027, or about £13,037 over a year. The personal allowance, the amount anyone can receive before income tax starts, is £12,570. It has been £12,570 since April 2021 and is not due to move until April 2031.
So for the first time the full new State Pension on its own would sit above the personal allowance, by about £467.
Most of the coverage stopped there and concluded that pensioners with no other income are about to start paying income tax. That is not quite what happens, because the government legislated for this moment ten months ago. The promise it made has a carve-out, though, and the carve-out is where the detail lives.
What the Budget actually promised
At the Autumn Budget in November 2025 the government addressed the crossover directly. The Budget document says:
The government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28 if the new or basic State Pension exceeds the Personal Allowance from that point.
That is paragraph 4.167 of Budget 2025: Strong Foundations, Secure Future.
Read closely, it is a promise about paperwork. Pensioners in that group will not have to pay small amounts of tax via Simple Assessment, the mechanism HMRC uses to collect from people with no employer or pension provider running PAYE for them. It does not obviously say the tax is not owed.
In an interview after the Budget the Chancellor went further and confirmed that eligible pensioners would not pay income tax on amounts above the personal allowance for the duration of this Parliament.
The Chartered Institute of Taxation noticed the gap between those two statements and called them “two quite different policy ambitions.” One is an administrative easement: the tax is technically due but HMRC does not chase small sums. The other is a genuine exemption. They have different consequences for anyone near the line, and at the time of writing the question is unsettled. The Low Incomes Tax Reform Group has set out the practical questions that follow: whether the relief comes by legislation or by operational decision, what the qualifying test is, and how HMRC identifies who qualifies without asking people to declare anything.
“Without any increments”: the three words that decide who qualifies
The promise, as drafted, covers pensioners whose only income is the basic or new State Pension, and whose State Pension has nothing added to it. That is a narrower group than “pensioners with no other income.”
You are likely to fall outside it if any of these apply:
- You deferred your State Pension and receive an increased amount as a result.
- You have additional State Pension from SERPS or the State Second Pension, which is common among people who reached State Pension age before April 2016.
- You have a protected payment on top of the new State Pension.
- You have any other taxable income at all: a workplace pension, a personal pension, earnings, rental income, or savings interest above the allowances.
That last line covers most pensioners. Anyone with an occupational pension of any size is outside this measure, and always was.
The State Pension uprating is not final until October
The 3.9% is the leading candidate for the uprating, not the uprating itself.
The triple lock raises the basic and new State Pension each year by the highest of three things: earnings growth, inflation, or 2.5%. The inflation leg is the Consumer Prices Index for the year to September, published by the ONS in mid-October. Only then is the April 2027 figure fixed. So the live question is whether September CPI comes in above 3.9%.
August CPI, published on 16 September, was 3.1%, up from 2.9% in July. Under the headline, core CPI was unchanged at 2.6% and services inflation was unchanged at 3.4%. The whole move was in goods, and the ONS names the driver: transport, and motor fuels in particular.
For inflation to overtake earnings, September CPI would have to climb from 3.1% to above 3.9% in a single month, a jump of more than 0.8 percentage points in the annual rate. Calling that impossible would be wrong. The ONS series has precedents: the annual rate rose 1.2 points in August 2021, 1.1 points in October 2021 and 2.0 points in April 2022. But all three sit inside the same eighteen-month energy-price shock, and each had a large one-off driver behind it. Moves of that size have come from events, never from drift.
On the evidence available today an earnings-led uprating looks the likely outcome, and an unremarkable one. The last three upratings were all earnings-led.
Most pensioners already pay tax on the State Pension
Strip out the group the Budget measure covers and the picture is simpler and less dramatic than the headlines suggest.
If you have a workplace or personal pension alongside your State Pension, you are almost certainly paying tax on the State Pension already, and have been for years. It is easy not to notice, because of how the tax is collected.
The Department for Work and Pensions does not operate PAYE. The State Pension is paid gross, with nothing deducted. HMRC deals with the tax by adjusting the tax code on your other pension: it reduces the tax-free amount set against that pension by roughly the value of your State Pension, so more tax comes out of the pension that does run PAYE. This is called coding out, and it is why the State Pension feels untaxed when it is not. The tax is real. It is taken somewhere else.
Simple Assessment, the mechanism named in the Budget, is the fallback for people with no PAYE income to code the tax against. HMRC sends a calculation, formally a PA302, and asks for payment directly. gov.uk describes it as what happens “if you did not pay enough tax and they could not collect it through your tax code,” and stresses it is not a Self Assessment return.
That is the problem the Budget measure was written to avoid: people with no other income receiving a tax bill for a small sum, and an administrative process built to collect it.
The personal allowance freeze runs to 2031, not 2028
A lot of what is published online on this point is out of date.
The personal allowance was frozen at £12,570 from April 2021, originally for four years. The Autumn Statement in 2022 extended the freeze by two years, to April 2028, and a great deal of commentary still stops there. The Autumn Budget in November 2025 extended it again, by a further three years, to April 2031.
That matters because the gap does not close on its own. The State Pension rises every year under the triple lock. That rule applies unchanged to the April 2027, 2028 and 2029 increases, and the government plans to adjust it from April 2030, as our piece on the triple lock after 2030 explains. The allowance stays where it is for another five years. Whatever happens in April 2027, the amount by which the State Pension exceeds the allowance grows each year after it, and so does the group affected.
What is still not known
Three things are unsettled, and saying so is more useful than guessing.
Whether the relief is an administrative easement or a tax exemption. The Budget document and the Chancellor’s interview say different things, and the difference is not cosmetic.
How the qualifying test will work. “Without any increments” is a phrase in a Budget document, not yet a rule with a definition attached.
How many pensioners this affects. There is no official figure from HMRC, the ONS or the Office for Budget Responsibility. Several numbers circulate, none traces back to a government estimate of this specific group, and this piece does not print one.
The short version
The full new State Pension is on course to reach about £250.70 a week from April 2027, roughly £467 above a personal allowance that is frozen until 2031.
If your only income is the basic or new State Pension with nothing added to it, the government has said you will not pay tax on the excess. It has said so in two different ways, and the stronger version came in an interview rather than in the Budget document.
If you have any other pension income, none of this is new. Tax on your State Pension has been collected all along through the code on your other pension, and April 2027 changes nothing about that.
And the number itself is not fixed until the September inflation figure lands in October.
Pension Plain and Savvy Investor Guide explain the rules. Neither gives financial advice, and nothing here is a recommendation about your own circumstances.
Sources
- ONS, Average weekly earnings in Great Britain, released 15 September 2026. Total pay 3.9%, regular pay 3.5%, May to July 2026.
- ONS, Consumer price inflation, UK: August 2026, released 16 September 2026. CPI 3.1%, core CPI 2.6% unchanged.
- gov.uk, The new State Pension: “The full rate of new State Pension is £241.30 a week.”
- gov.uk, Income Tax rates and allowances: personal allowance £12,570 for 2026/27.
- House of Commons Library, State Pension triple lock: “a government commitment to uprate the basic and new State Pension every year by the highest of earnings growth, inflation, or 2.5%.”
- HM Treasury, Budget 2025: Strong Foundations, Secure Future, November 2025, paragraph 4.167.
- Chartered Institute of Taxation, Tax Adviser, “Budget 2025: state pension only income and simple assessment”, 5 January 2026.
- gov.uk, Simple Assessment and Understand your Simple Assessment tax bill.
Footnote on the earnings measure. The triple lock’s earnings leg uses ONS average weekly earnings on the total pay measure, which includes bonuses, for the three months May to July. That is why this piece uses 3.9% rather than the 3.5% regular-pay figure from the same release. The Commons Library summary states the three legs but not the measure, so this is derived rather than quoted: the last three upratings were 4.8%, 4.1% and 8.5%, matching total pay for May to July in each preceding year exactly.
Update history: 1 October 2026
Update, 1 October 2026: On 29 September the Prime Minister said the triple lock will stay unchanged for this Parliament and be adjusted from April 2030. The sentence on the State Pension rising every year now says so and links to our article on the change. The April 2027 figures in this piece are not affected.