Overview
- HMRC told MPs it is working with the Treasury on a legislated fix so people whose only income is the basic or new State Pension will not be charged income tax.
- Cerys McDonald, HMRC director of individuals policy, said the change will be automated with no applications required and is intended to operate from April 2027.
- The full new State Pension is due to reach about £12,547 in 2026/27, narrowly below the frozen £12,570 Personal Allowance set to remain in place until 2031.
- Freedom of Information data reported more than 1.32 million end‑of‑year tax demand letters in 2023/24, up from 675,000 in 2021/22, highlighting current pressures.
- Campaigners seek broader relief, including a £1,000 pensioner‑specific uplift, while a petition to double the allowance for pensioners drew tens of thousands of signatures but was rejected by the Treasury as costly and untargeted.