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21h ago

8.7 Million Pensioners Expected to Pay Income Tax as Analysis Finds Many Get Less Than the Full State Pension

A frozen personal allowance and Triple Lock increases are drawing more retirees into tax even as gaps in National Insurance records leave thousands with very small weekly payments.

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Overview

  • HMRC projects about 8.7 million pensioners will be liable for income tax in 2025/26, up roughly 420,000 from last year and 1.85 million over a decade.
  • Royal London reports only around half of the 3.5 million people on the post‑2016 system receive the full New State Pension, with more than 17,000 getting under £20 a week.
  • Personal Allowance remains frozen at £12,570 until April 2028, while the full New State Pension is £11,973 in 2025/26 and is forecast to reach about £12,578.80 in 2027/28.
  • DWP figures show 13 million people are now of State Pension age, and the legislated State Pension age is set to rise from 66 to 67 between 2027 and 2028.
  • An estimated 453,000 UK pensioners living in countries without reciprocal agreements do not receive annual State Pension upratings.