Overview

• The triple lock guarantees annual state pension rises by the highest of inflation, wage growth or 2.5%, pushing the full new pension to an estimated £12,578 in April 2027.
• The income tax personal allowance has been held at £12,570 since 2021 and is set to remain frozen until 2028 under Labour’s manifesto pledge.
• On April 6, 2027, every retiree drawing the full state pension will exceed the tax-free threshold and face an income tax bill regardless of additional earnings.
• Current forecasts show many pensioners could pay as little as £1.60 a year on £8 of taxable pension income under the current thresholds.
• Without uprating the personal allowance or implementing other reforms, retirees will confront growing fiscal drag and increased HMRC correspondence.