Pensions: Income Tax
The question
To ask the Chancellor of the Exchequer, whether the exemption for basic or new state pension to not have to pay small amounts of tax through simple assessment from April 2027 will apply to recipients of the State Earning Related Pension Scheme.
Answered by Torsten Bell
The State Pension is taxable income along with other pension income. As the State Earnings-Related Pension Scheme (SERPS) is extra money on top of the basic State Pension, it is also taxable.
The Budget has confirmed that the basic and new State Pension will be uprated by 4.8% in 2026-27, in line with our commitment to the Triple Lock. This means pensioners whose sole income is the basic or new State Pension without any increments will not pay income tax in 2026-27.
The Budget also announced that the Government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28. The Government will set out more detail next year.
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