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OBR: Frozen Personal Allowance to Pull 600,000 More Pensioners Into Income Tax in 2026–27

Ministers say people with only the state pension will not be taxed this year or next, yet the promised exemption’s mechanics remain unpublished.

Overview

  • From 6 April 2026, the full new State Pension rises 4.8% to £241.30 a week (£12,547.60 a year) and the basic pension increases to £184.90.
  • The Budget watchdog projects one million additional pensioners in the tax net by 2030–31 due to threshold freezes, with only about £0.1bn extra revenue that year.
  • DWP minister Torsten Bell confirmed no income tax for those whose sole income is the basic or full new State Pension in 2026/27 and 2027/28, with details to follow.
  • State Pension age starts increasing from 66 to 67 on 6 April 2026, phasing in to 2028, as a further review considers longer‑term sustainability.
  • Charities warn of hardship, with Carers UK estimating around 26,000 unpaid carers could face an average £7,011 shortfall from the later pension age.