Overview
- Rachel Reeves has committed that retirees receiving only the state pension will not pay income tax on it, with Martin Lewis confirming this applies from 2027 within this Parliament.
- Lewis says the full new State Pension is set to exceed the £12,570 personal allowance from 2027 due to the triple lock, while the allowance is frozen until 2031.
- The Chancellor has indicated the exemption will not extend to pensioners with any additional taxable income, meaning even very small private pensions could trigger a tax bill.
- ISAs and Premium Bonds remain tax-free, but how savings interest within the personal savings allowance will interact with the new exemption has not been set out.
- Lewis highlighted concerns about older people facing self-assessment for small sums and noted that HM Treasury and HMRC have yet to publish detailed rules.