State Retirement Pensions
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential implications of the level of the new state pension for the finances of people subject to the lower personal tax allowance.
Answered by Torsten Bell
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement
Through our commitment to protect the Triple Lock, over 12 million pensioners benefitted from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast
The Personal Allowance - the amount an individual can earn before paying tax - will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds.
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