Overview
- The DWP’s annual review confirms a 4.8% state pension uprating for 2026/27, taking the full new rate to about £241 a week from April.
- Chancellor Rachel Reeves says pensioners whose only income is the state pension will not be taxed on it during this Parliament and will not be required to file Self-Assessment.
- Projections show the full new state pension is on course to breach the £12,570 personal allowance around 2027 due to frozen thresholds, prompting work on an administrative fix.
- Experts warn of a two-tier outcome as roughly 2.5 million on the old system already pay income tax on their state pension, and those with even small private pensions would still face tax.
- From April 2027 the cash ISA limit for under‑65s falls to £12,000 and tax on savings interest rises to 22%/42%/47%, with analysts estimating around two million savers previously exceeded the new cash ISA cap; Universal Credit standard allowances also increase by 6.2%.