New state pension ‘guaranteed’ to exceed tax threshold in 2027 under triple lock policy
Pensions & benefits Autumn budget Pensions taxToday’s confirmation that the new state pension will be £230.25 per week from April 2025, coupled with frozen tax thresholds until April 2028, means that the new state pension is guaranteed to exceed the income tax personal allowance in April 2027.
This is because the triple lock formula provides a floor of 2.5% increases, meaning the rate will rise to at least £236 in April 2026 and £241.90 in April 2027. The April 2027 rate is £12,578 per year, just above the £12,570 tax threshold. This could mean hundreds of thousands of pensioners are taxed on just £8 per year, with a tax bill of £1.60. If tax-free personal allowance then rise by CPI but the state pension rises by more, then this situation will continue indefinitely.
The table shows the relevant figures: