Fri, 28 Nov 2025

Fri, 28 Nov 2025 State pensioners with no other income will not pay tax

The chancellor says those who only receive the state pension won't have to pay income tax before 2030.

* People who rely only on their state pension will not have to pay income tax, according to Chancellor Rachel Reeves.
* The state pension is expected to rise above the normal tax threshold by April 2027 due to frozen tax thresholds and increased payments.
* However, those who receive no other income than their state pension will be exempt from paying income tax before 2030, even if they earn above the tax threshold.
* Experts have raised concerns that this policy could create complexity in the system, as most pensioners already pay tax due to receiving additional pensions.
* The state pension for those reaching state pension age after April 2016 is set to be £12,547.60 next year, just below the current income tax threshold of £12,570.
* The threshold will likely be breached by 2027, meaning any portion of the pension above this threshold would be taxed.
* Small tax sums would normally be collected through the Simple Assessment process, but the Chancellor has stated that those relying solely on their state pension will not have to pay tax.
* About three-quarters of pensioners already pay income tax due to receiving additional income beyond their state pension.
* Experts have warned that this policy could create an unfair advantage for pensioners on the new system and make it difficult for the Treasury to implement.
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