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Government Confirms Tax Exemption for Pensioners with Only State Pension During This Parliament

HMRC says new legislation will be taken through a future finance bill to deliver the pledge.

Overview

  • State pension payments rise by 4.8% from 6 April 2026, taking the full new rate to £241.30 a week, or about £12,547.60 a year.
  • The new rate sits just over £20 below the £12,570 personal allowance, and analysts warn it could overtake the threshold from April 2027 if freezes persist.
  • The exemption applies only to people whose sole income is the full new or basic state pension without increments, with details to be set out later this year.
  • HMRC told MPs primary legislation is required, with the next Autumn finance bill identified as the likely vehicle and a project team already mobilised.
  • Separately, the state pension age begins a phased rise from 66 to 67 between April 2026 and April 2028, affecting those born on or after 6 April 1960.