The State Pension went up by 4.8% this April. That is good news for your income, but it has also pushed the full new State Pension to within a whisker of the tax-free Personal Allowance. So, will you pay tax on your State Pension in 2026/27?
For most people the answer depends on what other income you have. Here is how it works, with simple examples.
Quick answer: The State Pension is taxable, but it is paid without tax taken off. The full new State Pension is £12,547.60 a year in 2026/27, just £22.40 below the £12,570 Personal Allowance. If it is your only income, you will not pay tax on it this year. If you have a workplace or private pension, or earnings, you will usually pay tax through your tax code.
In this guide
- Is the State Pension taxable?
- The 2026/27 numbers
- Worked examples
- How the tax is collected
- What about 2027 onwards?
- Ways to pay less tax in retirement
Is the State Pension taxable?
Yes. The State Pension counts as taxable income, just like a salary or a private pension. What makes it different is that the Department for Work and Pensions pays it to you in full, without deducting any tax.
Whether you actually pay tax depends on your total income for the tax year. If your total income is below your Personal Allowance, you pay nothing. If it is above, you pay tax on the amount over the allowance.
The 2026/27 numbers
- Full new State Pension: £241.30 a week, or £12,547.60 a year (for people who reached State Pension age after April 2016)
- Personal Allowance: £12,570 a year, frozen until April 2031
- Basic rate of income tax: 20% on income between £12,571 and £50,270 (Scotland has different rates and bands)
The gap between the two is now just £22.40. Because the Personal Allowance is frozen while the State Pension keeps rising under the triple lock, more and more pensioners are being pulled into paying tax.
If you are on the older basic State Pension, the basic amount is lower, but any Additional State Pension (sometimes called SERPS or State Second Pension) you receive also counts towards your total.
Worked examples
Example 1: State Pension only
Margaret gets the full new State Pension of £12,547.60 and has no other income. Her income is below the Personal Allowance, so she pays no tax.
Example 2: State Pension plus a workplace pension
David gets the full new State Pension and £5,000 a year from an old workplace pension. His total income is £17,547.60.
- Taxable income: £17,547.60 minus £12,570 = £4,977.60
- Tax at 20%: about £995 a year
Because his State Pension uses up almost all of his Personal Allowance, nearly all of his workplace pension is taxed. HMRC collects this by adjusting the tax code his pension provider uses.
Example 3: State Pension plus Additional State Pension
Joan reached State Pension age before 2016. With her basic and Additional State Pension, she gets £13,500 a year and has no other income.
- Taxable income: £13,500 minus £12,570 = £930
- Tax at 20%: £186 for the year
As she has no other pension or job to collect tax through, HMRC will send her a Simple Assessment bill instead.
How the tax is collected
If you have a workplace or private pension, or a job
HMRC changes your tax code so that the tax due on your State Pension is taken from your other income. If you have more than one pension or job, only one of them will collect the State Pension tax. It is worth checking your tax code is right in the HMRC app or on GOV.UK, especially in your first year of retirement.
If the State Pension is your only income
If you owe tax, HMRC sends a Simple Assessment letter (form PA302), usually between July and August after the tax year ends. It shows how the tax was worked out. The payment deadline is usually 31 January, or 3 months from the date of the letter.
Check the letter carefully. If anything is wrong, contact HMRC within 60 days. You can pay online on GOV.UK or through the HMRC app. Be careful with calls, texts or emails claiming to be from HMRC about a tax bill. Our guide to avoiding scams in retirement explains what to look out for.
If you fill in a Self Assessment tax return
You must include your State Pension and any other pension income on your return.
What about 2027 onwards?
If the State Pension keeps rising and the Personal Allowance stays frozen, the full new State Pension is likely to go over £12,570 from April 2027. That would mean people with no other income could owe a small amount of tax.
In the November 2025 Budget, the government said it plans to make sure that people whose only income is the basic or new State Pension, without any increments, will not have to pay these small amounts through Simple Assessment from 2027/28. It said more detail would follow, so keep an eye out for updates.
This only covers people whose sole income is the State Pension. If you have a private pension, earnings or other taxable income, you will still pay tax as normal.
Ways to pay less tax in retirement
- Claim Marriage Allowance. If you are married or in a civil partnership, and one of you has income below the Personal Allowance while the other is a basic rate taxpayer, you can transfer £1,260 of allowance. That saves up to £252 a year, and you can backdate it to April 2022. If either of you was born before 6 April 1935, Married Couple’s Allowance may be worth more.
- Use your tax-free pension cash wisely. Usually 25% of a private pension can be taken tax-free. Taking it in stages can help keep your income below tax thresholds. See our guide to UFPLS and pension tax-free cash.
- Use ISAs. Income and growth inside an ISA are tax-free and do not count towards your total income. Read our guide to ISAs for retirees.
- Know your savings allowances. If your other income is low, you may be able to earn up to £5,000 of savings interest tax-free through the starting rate for savings, plus up to £1,000 through the Personal Savings Allowance for basic rate taxpayers.
- Check for overpaid tax. Emergency tax codes are common when you first take money from a pension. Here is how to check if you are due a tax refund.
Frequently asked questions
Is tax taken off my State Pension before I get it?
No. It is always paid in full. Any tax due is collected through your tax code or a Simple Assessment.
Does Pension Credit count as taxable income?
No. Pension Credit is not taxable. Neither is Attendance Allowance. See our guide to Attendance Allowance if you need help with personal care.
I deferred my State Pension. Is the extra amount taxable?
Yes. Extra State Pension you get from deferring counts as taxable income too.
Final thoughts
For most people, the State Pension on its own will not trigger a tax bill in 2026/27, but once you add a workplace or private pension, tax usually follows. The key is to know your total income, check your tax code, and use the allowances available to you.
For a wider view of the rules, read our round-up of tax changes affecting UK pensioners and our new tax year retirement planning checklist. If you have gaps in your record, see whether voluntary National Insurance is worth paying.
