Overview
- The full new State Pension rises 4.8% from April 2025 to about £241.30 a week (~£12,548 a year) as the £12,570 personal allowance remains frozen, with officials working on a simple workaround before the pension is projected to breach the threshold around 2027.
- Rachel Reeves said pensioners whose only income is the State Pension will not pay income tax or file returns during this Parliament, but those with any additional income would still face tax under normal rules.
- Former pensions minister Steve Webb warned the approach could create a two‑tier outcome, noting around 2.5 million pensioners on the old system already pay income tax on their state pension.
- Pension Credit will be uprated by 4.8% to roughly £238 a week, yet DWP figures show about 910,000 eligible households are not claiming it, prompting a government outreach effort with Age UK to boost take‑up and unlock linked help such as Winter Fuel Payments and free TV licences for over‑75s.
- The Universal Credit standard allowance will rise by 6.2% from April, lifting monthly payments, while separate savings policy changes reported by analysts include a lower ISA allowance from 2027 that could increase tax on interest for up to two million savers.