The Department for Work and Pensions has confirmed pensioners whose sole income is the Basic or New State Pension will not pay income tax over this Parliament

The Department for Work and Pensions (DWP) has confirmed that pensioners whose sole income is the Basic and full New State Pension, “without any increments, will not pay any income tax this tax year or next”. Pensions Minister Torsten Bell also said the UK Government is committed to making sure older people can live with the “dignity and respect they deserve in retirement”.

His remarks came in a written response to Labour MP Euan Stainbank who asked whether Chancellor Rachel Reeves plans to extend the income tax exemption to older people with private pensions “who receive the same income as those who solely receive the maximum State Pension”.

The Chancellor announced in November that the Personal Allowance will remain frozen at £12,570 until April 2031. Mr Bell said the State Pension is the “foundation” of the support available to people in retirement adding that over the course of this Parliament, the yearly amount of the full New State Pension is on track to go up by around £2,100.

He continued: “When it comes to taxes, social security benefits are treated differently depending on why they are paid. Generally, benefits that replace income, like the State Pension, are taxable.

“However, I can confirm that those whose sole income is the basic and full new State Pension, without any increments, will not pay any income tax this tax year or next. Furthermore, the Chancellor has said that those whose only income is the Basic or New State Pension without any increments will not have to pay income tax over this Parliament.”

The DWP explained the UK Government will achieve this by “easing the administrative burden” for pensioners so that they do not have to pay small amounts of tax via Simple Assessment from 2027/28. More details on this will be announced “in due course”, reports the Daily Record.

Millions of older people are set for a significant State Pension increase next month when the New and Basic State Pension rises by 4.8 per cent for the 2026/27 financial year. The new payment rates will take effect from 6 April.

The increase will mean those on the full New State Pension will receive £241.30 per week, whilst those on the maximum Basic State Pension will get £184.90 per week.

It’s crucial to note that the amount of State Pension someone receives depends on their National Insurance contributions. To receive the full New State Pension you need around 35 years’ worth, but this may differ if you were ‘contracted out’.

The full New State Pension will rise by approximately £574 to £12,547 over the new financial year.