The short answer. In 2026/27 the full new State Pension is £241.30 a week, or £12,547.60 a year, against a Personal Allowance of £12,570 — you are £22.40 under, so there is no tax on a full new State Pension this year. In 2027/28 it goes over, and that is arithmetic rather than forecasting: even on the triple lock's 2.5% floor the rate becomes £247.35 a week, £12,862.20 a year, £292.20 above a frozen allowance. The bill is small — roughly £58 at the floor, roughly £96 to £98 on the earnings data available in August 2026. A Budget 2025 easement is reported — quoted by LITRG and the CIOT, though we could not find it in the Budget document itself — under which pensioners whose sole income is the basic or new State Pension without any increments would not pay these amounts via Simple Assessment from 2027-28. It is not in any legislation and no mechanism has been published.
Is the State Pension already above the Personal Allowance?
No. Several outlets have reported that the 2026/27 State Pension has already breached the allowance, usually quoting a figure around £12,590. That figure does not correspond to anything. The arithmetic is short enough to check in one line:
- £241.30 × 52 = £12,547.60. That is the full new State Pension for 2026/27. The weekly rate is confirmed on gov.uk and in the DWP benefit and pension rates for 2026 to 2027.
- £12,570 − £12,547.60 = £22.40. That is your remaining headroom, for the year to 5 April 2027.
The 52-week multiplier is not an approximation we have chosen; HMRC uses it. gov.uk states that "after your first year of getting the State Pension, you'll pay tax based on 52 weeks of payments each year". In your very first part-year of entitlement the figure is lower again.
Two things then make the crossover permanent rather than a one-year quirk. The Personal Allowance is frozen at £12,570 until 5 April 2031, extended by three further years at Budget 2025. And the triple lock is committed "for the duration of this Parliament", so the pension rises by at least 2.5% every April. Once the two lines cross, the gap widens every year — which is the whole mechanism behind our fiscal drag tracker, and why HMRC now projects 8.72 million income tax payers above State Pension age in 2025/26, 22.3% of all taxpayers, up from 7.13 million three years earlier.
How much tax will you pay in 2027/28?
Nobody knows the April 2027 uprating yet. The earnings limb of the triple lock uses ONS total pay growth for May to July 2026, which is not published until mid-September 2026; the inflation limb uses September 2026 CPI, published in October. So the honest answer is a range, and here it is, with each row worked from the same two steps: uprate the weekly rate and round to the nearest 5p, multiply by 52, then take 20% of whatever sits above £12,570.
| Scenario | Weekly | Annual (×52) | Over £12,570 | Tax at 20% |
|---|---|---|---|---|
| 2026/27 today | £241.30 | £12,547.60 | −£22.40 | £0.00 |
| April 2027 at 2.5% (triple lock floor) | £247.35 | £12,862.20 | £292.20 | £58.44 |
| April 2027 at 4.0% | £250.95 | £13,049.40 | £479.40 | £95.88 |
| April 2027 at 4.1% (latest ONS total pay) | £251.20 | £13,062.40 | £492.40 | £98.48 |
The 4.1% row uses annual growth in total pay including bonuses for April to June 2026, from the ONS bulletin released on 18 August 2026. It is a proxy, not the figure the triple lock will use. Regular pay excluding bonuses was running at 3.5% in the same bulletin, which would give £249.75 a week, £12,987 a year and £83.40 of tax. Treat £58 as a hard floor and roughly £100 as the current upper marker.
Two things that are not in those numbers. There is no National Insurance: once you are over State Pension age you pay no employee or self-employed NICs, so 20% is the whole marginal cost. And at £98.48 on £13,062.40 of income the effective rate on your total income is 0.75% — this is a genuinely small bill, which is precisely why the administration of collecting it has become the interesting part.
What about Scottish taxpayers?
Scotland sets its own rates on non-savings income, and the first slice above the Personal Allowance is taxed at the Scottish starter rate of 19% rather than 20%. So a Scottish taxpayer's bill on the same pension is slightly lower: if the whole excess falls inside the starter band, the 2.5%-floor bill would be £55.52 rather than £58.44. We have deliberately not published a firmer Scottish figure — the 2027/28 Scottish bands are not set until the Scottish Budget in late 2026, and the starter band's width matters. Welsh rates are currently set at the UK rates, so Welsh taxpayers pay the figures in the table above.
How would HMRC actually collect the tax?
Start with the fact that trips most people up: the State Pension is paid gross. There is no PAYE on it, no tax deducted before it reaches your bank account. gov.uk puts it in one sentence — "Your State Pension is taxable income, but tax is not taken off before you get it". HMRC's own Employment Income Manual at EIM75700 says the same thing to its staff: "If the State Pension is the individual's only income it will be paid to the individual without deduction of tax." The charge itself sits in section 577 ITEPA 2003, and it is assessed on an accruals basis — the amount you were entitled to in the tax year, not the amount that happened to land in your account.
Because nothing is withheld at source, the tax has to be picked up afterwards, and there are two completely different routes depending on whether you have any other income.
If the State Pension is your only income
You get a Simple Assessment. gov.uk is explicit: "If you go over your Personal Allowance and you have tax to pay, HMRC will send you a Simple Assessment tax bill. This will tell you how much you owe and how to pay it." Needing to pay tax on your State Pension is one of the four triggers listed on gov.uk's Simple Assessment page, alongside owing tax that cannot be collected through a tax code, owing £3,000 or more, and having untaxed income such as savings interest.
- The letter is a PA302. HMRC's own news release confirms the official form number, though the designation does not appear on the main guidance page.
- Expect it after the tax year, not during it. HMRC's Simple Assessment guide for pensioners says letters are usually issued between July and August following the end of the tax year. For 2027/28, that means summer 2028.
- Payment deadline: 31 January after the tax year. If the notice is dated on or after 31 October, you get three months from the date of the letter instead. That is not HMRC policy but statute — section 59BA of the Taxes Management Act 1970.
- 60 days to dispute. If anything in the calculation is wrong, you must contact HMRC within 60 days. Payment uses the 14-character reference beginning with X on the letter, and you can pay in instalments provided the whole amount clears by the deadline.
If you also have a private pension
Then you will probably never see a Simple Assessment, because HMRC will take the tax out of the private pension instead. The mechanism is a coding deduction: your State Pension is entered against your allowances, cutting the tax-free amount the private pension payer is allowed to give you, so that payer withholds tax on both. HMRC's PAYE Manual at PAYE76055 states the duty directly: state pension "is paid gross and not under deduction of tax", and where there is a source on which PAYE operates, HMRC has a duty to collect the tax on both by adjusting the code.
Once the State Pension deduction is bigger than your allowances, the code flips to a K code — gov.uk's plain-English definition is that you have income you are not paying tax on which is more than your Personal Allowance. Scottish codes carry an S prefix and Welsh a C prefix. There is one important protection built in: the payer can never deduct more than 50% of the payment. Where a K code would breach that, the code still operates but the deduction is capped at half the pension, and the shortfall is dealt with after the year end.
gov.uk's own worked example shows how that plays out on a small private pension:
| Step | Amount |
|---|---|
| State Pension (paid gross) | £16,000 |
| Private pension | £1,500 |
| Total income | £17,500 |
| Less Personal Allowance | −£12,570 |
| Taxable | £4,930 |
| Tax due at 20% | £986 |
| Collected through the private pension code (capped at 50% of £1,500) | −£750 |
| Left to pay by Simple Assessment | £236 |
Two footnotes worth knowing. Underpayments of £3,000 or more cannot be coded out at all — PAYE12070 caps coding-out at £2,999.99 and directs that larger amounts must be collected another way. And the annual coding refresh is automatic: DWP sends HMRC the uprating data each year and HMRC revises every record carrying a state pension deduction towards the end of January, so your April code should already reflect the new rate.
Will the Budget 2025 easement cancel the bill?
Possibly — and we are going to be careful here, because this is the part of the story most coverage overstates.
At Budget 2025 the government announced that it would ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments, so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28. That wording is quoted identically by the Low Incomes Tax Reform Group, by the Chartered Institute of Taxation's Tax Adviser, and in a UK Parliament written question. On 27 November 2025 the Chancellor went further on television, saying that pensioners with only a State Pension would not be made to fill in a tax return and framing it as a commitment for this Parliament.
What we could not do is find that sentence in the Budget document itself. Targeted searches of the Budget 2025 HTML, the Overview of Tax Legislation and Rates and the Budget speech on gov.uk did not surface it; it is most likely in a Budget annex table or the policy costings PDF. We are telling you that rather than dressing a secondary source up as a primary one. Three further caveats matter more than the announcement itself:
- It is not law. The draft Finance Bill 2026-27 package published on 13 July 2026 contains nothing on the State Pension, pensioners, Simple Assessment or a state-pension-only exemption. The government said it was exploring the best way to achieve this and would set out more detail; as at 24 August 2026 that detail has not appeared.
- Nobody has said whether it removes the tax or only the paperwork. The Budget wording is administrative — it is about not paying "via Simple Assessment". The Chancellor's remarks sounded like relief from the tax. If the liability remains legally due but Simple Assessment is switched off, HMRC needs either another collection route or a statutory exemption, and neither exists yet. LITRG flags this ambiguity as unresolved, and so do we.
- "Without any increments" is undefined. On a plain reading it excludes anyone with deferral increments, a protected payment, Additional State Pension, Graduated Retirement Benefit or an inherited amount — and those are exactly the people most likely to be over the allowance in the first place. No official definition has been published, so do not assume you are inside it.
The practical position, then: if you have any other income — a private pension, savings interest above your Personal Savings Allowance, rental income, part-time earnings — the easement as announced does not describe you, and the ordinary coding-out machinery above will handle your tax as it always has.
Is there a minimum amount HMRC will not chase?
There is no published de minimis, and you should not plan on one.
What is true is that HMRC operates internal tolerances. PAYE93075 confirms that "tolerances are applied to both underpayments and overpayments within the PAYE Service", that they may sit at different levels for underpayments and overpayments, and that they may differ by the year being reconciled. Where an underpayment falls within tolerance, HMRC does not issue a calculation as a matter of course. What the manual conspicuously does not do is state the figures — and no pound amount appears anywhere in published gov.uk guidance. A tolerance you cannot see, that HMRC can move, is not a threshold you can rely on.
The other thing frequently mistaken for a small-amounts rule is Extra-Statutory Concession A19. It is not one. ESC A19 is a concession for HMRC error, and all three of its conditions must be met: HMRC did not use information it was given, it told you about the tax more than 12 months after the end of the tax year in which it received that information, and it was reasonable for you to think your affairs were in order. A correctly calculated State Pension bill, issued on time, meets none of them — HMRC has made no mistake. The £50 figure that circulates in commentary attaches to ESC A19 write-offs, not to a general practice of ignoring small tax.
Does this put you into Self Assessment?
No. The State Pension appears nowhere on either of gov.uk's lists of who must send a tax return. The mandatory list covers sole traders over £1,000, business partners, people liable to Capital Gains Tax, the High Income Child Benefit Charge where it is not being collected through PAYE, and off-payroll workers repaying a student loan. The "you may also need to" list covers rent, tips, savings interest, dividends and foreign income. A State Pension over the allowance is on neither.
Simple Assessment exists precisely so that people in this position do not have to file. HMRC does the calculation, writes to you with the figure, and you check it and pay. gov.uk states plainly that Simple Assessment is not the same as making a Self Assessment tax return. There is one edge case: PAYE76055 notes that where the 50% K code limit is breached persistently, HMRC may move the case into Self Assessment — but that is about a large state pension against a tiny private pension, not about the State Pension alone.
Can Marriage Allowance wipe out the bill?
Yes — but only in one direction, and most consumer coverage gets it backwards.
Marriage Allowance lets one spouse or civil partner transfer £1,260 of Personal Allowance to the other. The £1,260 is fixed by section 55B of the Income Tax Act 2007 as 10% of the Personal Allowance rounded up to the nearest £10. Critically, the person receiving it does not get a bigger allowance: they get a tax reducer worth 20% × £1,260 = £252, capped at their actual liability and not refundable.
So the question is which side of the transfer you are on.
- You are the recipient — this works. If your spouse's income is below £12,570 and they transfer to you, your £95.88 bill (on the 4.0% scenario) is cancelled outright by the £252 reducer. The unused £156 is simply lost, not paid back. This is the case worth acting on: a pensioner over the allowance married to someone under it.
- You are the transferor — this makes it worse. Transfer away and your own allowance falls to £11,310. On a £13,049.40 pension your taxable income jumps from £479.40 to £1,739.40 and your tax rises from £95.88 to £347.88. Your partner saves £252; you pay £252 more. The couple is exactly where it started, and you have created a bill where there wasn't one.
One technical point, because it gets misreported: section 55C does not actually require the transferor's income to be below the Personal Allowance — it only requires that they would not become a higher-rate taxpayer. So the election is legally available above the allowance. It is simply value-destroying, because a couple only nets a gain where the transferor's income sits between £11,310 and £12,570. gov.uk's simpler eligibility wording is the right practical guide. Claims renew automatically and can be backdated four years, and gov.uk confirms that receiving a pension does not affect an application.
Married Couple's Allowance for the oldest pensioners
If either of you was born before 6 April 1935 there is a much larger relief available — and that birth cohort is precisely the group on the old basic State Pension. For 2026/27 the Married Couple's Allowance runs from a minimum of £4,530 to a maximum of £11,700, and relief is given at 10%, so the tax reduction is between £453 and £1,170. That is ten to twenty times the size of anything discussed on this page. It tapers where income exceeds an income limit, so check the current figures in HMRC's rates and allowances publication rather than relying on the summary pages, which were still showing 2025/26 amounts when we checked on 24 August 2026.
Who is not affected by the 2027 crossover?
If you reached State Pension age before 6 April 2016 — men born before 6 April 1951, women born before 6 April 1953 — you are on the old system, and the headline does not describe you. The full basic State Pension for 2026/27 is £184.90 a week, £9,614.80 a year: £2,955.20 below the Personal Allowance. Even compounding at the triple lock's 2.5% floor, the basic rate alone will not reach £12,570 for well over a decade. The Category C and D non-contributory rate of £110.75 a week, £5,759 a year, is further away still.
But two groups cross the line sooner than any of this suggests, and they are not small.
- Old-system pensioners with Additional State Pension or Graduated Retirement Benefit. SERPS and S2P, increments and GRB are all paid on top of the basic rate and all taxable. You need roughly £2,955 a year — about £57 a week — of add-ons to cross the allowance, which plenty of long-serving employees who were never contracted out comfortably exceed. Many of them are already over the allowance today, years ahead of the 2027 headline. Note that these add-ons are uprated by CPI, 3.80% for 2026/27, not by the triple lock's 4.8%.
- New-system pensioners with a protected payment or deferral increments. If you paid into the Additional State Pension before 2016 and would have done better under the old rules, you get a protected payment on top of the full new rate. Deferral increments work the same way. Both are taxable, both bring the crossover forward, and both look likely to put you outside the Budget 2025 easement, which is drafted around a pension "without any increments".
If you are unsure which system you are on or what your own figure is, our complete State Pension guide for 2026/27 sets out the two systems side by side, and we track the April 2027 uprating as the ONS and CPI data land on our April 2027 State Pension rise page.
What should you do now?
- Get your actual number, not the headline one. The full new State Pension is a maximum, not a default — plenty of people receive less, and some receive more. Check your entitlement with a State Pension forecast or directly at gov.uk/check-state-pension before you assume any of the figures above apply to you.
- Do not defer to dodge the tax. Deferring raises your weekly rate by about 5.8% a year, which pushes you further above the allowance when you eventually claim, and deferral increments may also disqualify you from the announced easement. A £58 to £98 bill is not a reason to restructure a lifetime income.
- Check Marriage Allowance in both directions. If your spouse or civil partner has income below £12,570, they should be transferring to you. If they are over it, do nothing. Backdating runs four years, so a claim made now can still reach the 2022/23 year.
- Keep the letter if a PA302 arrives. Check the figures against your own records, note the 60-day dispute window, and diary the payment deadline — 31 January after the tax year, or three months from the date of the letter if it is dated on or after 31 October.
Sources
- gov.uk — How your State Pension is taxed
- gov.uk — Tax when you get a pension: how your tax is paid
- HMRC Employment Income Manual EIM75700 — State Pension
- HMRC PAYE Manual PAYE76055 — state pension and benefits in the code
- HMRC PAYE Manual PAYE12070 — coding out underpayments
- HMRC PAYE Manual PAYE93075 — reconciliation tolerances
- gov.uk — Check if you need a Simple Assessment
- gov.uk — Pay your Simple Assessment tax bill
- HMRC — Simple Assessment guide for pensioners
- legislation.gov.uk — TMA 1970 s59BA (Simple Assessment payment date)
- gov.uk — If HMRC did not act on information provided (ESC A19)
- gov.uk — Who must send a Self Assessment tax return
- gov.uk — Marriage Allowance
- legislation.gov.uk — ITA 2007 s55B (transferable amount)
- legislation.gov.uk — ITA 2007 s55C (conditions for the election)
- HMRC — Income Tax rates and allowances, current and past
- DWP — Benefit and pension rates 2026 to 2027
- gov.uk — The new State Pension: what you'll get
- gov.uk — Income Tax rates and Personal Allowances
- HMRC policy paper — maintaining the Personal Allowance until 5 April 2031
- HM Treasury — Budget 2025
- HM Treasury — Finance Bill 2026-27 draft legislation (13 July 2026)
- ONS — Average weekly earnings in Great Britain, August 2026
- LITRG — State Pension tax debate: issues arising from the Budget 2025 announcement (secondary source for the easement wording)
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