Is the State Pension taxable? How it is taxed in 2026/27, with worked examples
Yes, the State Pension is taxable income, but it is paid without tax taken off. In 2026/27 the full new State Pension is £241.30 a week, or £12,547.60 a year, which is £22.40 below the £12,570 Personal Allowance. If it is your only income you pay no tax on it this year.
| Figure | 2026/27 |
|---|---|
| Full new State Pension | £241.30 a week, £12,547.60 a year |
| Full basic State Pension | £184.90 a week, £9,614.80 a year |
| Personal Allowance | £12,570, frozen until April 2031 |
| Gap between full new State Pension and allowance | £22.40 |
| Basic rate of Income Tax | 20% on £12,571 to £50,270 |
| Employees' National Insurance after State Pension age | Class 1 stops |
Is the State Pension taxable
Yes. HMRC lists the State Pension among the state benefits you pay Income Tax on, and GOV.UK says your total income for tax includes the basic or new State Pension, any Additional State Pension, private and workplace pensions, earnings and other taxable income. You pay tax only if that total comes to more than your Personal Allowance, which is £12,570 in 2026/27.
The difference from a wage or a works pension is that the State Pension is paid in full, with no tax taken off before it reaches you. If tax is due, HMRC collects it another way, usually through the tax code on another pension or a job, or by sending a bill after the tax year ends. If you are still employed, you stop paying Class 1 National Insurance once you reach State Pension age, although Income Tax on your wages carries on.
The State Pension is paid every 4 weeks, but tax is worked out over the tax year from 6 April to 5 April. After your first year of getting it, you are taxed on 52 weeks of payments each year.
State Pension and the Personal Allowance in 2026/27
The State Pension went up by 4.8% in April 2026, in line with earnings growth, while the Personal Allowance stayed at £12,570. That leaves the full new State Pension only just under the tax-free amount.
| Pension | Weekly | Yearly | Room left in the £12,570 allowance |
|---|---|---|---|
| Full new State Pension (reached State Pension age on or after 6 April 2016) | £241.30 | £12,547.60 | £22.40 |
| Full basic State Pension (reached State Pension age before 6 April 2016) | £184.90 | £9,614.80 | £2,955.20 |
Some people on the old system get more than the basic amount because of Additional State Pension, and anyone with a protected payment on the new system gets more than £241.30. For them, the State Pension alone can already go over the allowance. You can download a letter showing your exact amount with the GOV.UK service to get proof of your State Pension, or estimate it with our State Pension calculator.
The squeeze will tighten. The Budget on 26 November 2025 kept the Personal Allowance at £12,570 until April 2031, and the State Pension rises each year by the highest of earnings growth, price inflation or 2.5%. Even a 2.5% rise in April 2027 would take the full new State Pension to roughly £12,861 a year, above the allowance. We explain the freeze in £12,570 tax threshold frozen to 2031.
How HMRC collects tax on the State Pension
How you pay depends on what other income you have. There are three main routes.
- If you also have a private or workplace pension, the provider usually takes off any tax you owe, including the tax due on your State Pension. HMRC does this by giving that pension a tax code with a much smaller tax-free amount, because most of your allowance has already been used by the State Pension. If you have more than one private pension, HMRC asks one provider to collect it.
- If you are still working, your employer usually collects the tax on your State Pension through your wages in the same way.
- If the State Pension is your only income, or the tax cannot all be collected through a tax code, HMRC sends a Simple Assessment bill (form PA302) after the tax year ends. Self-employed people include the State Pension on their Self Assessment tax return instead.
There is a limit on how much can be collected through a tax code. In HMRC's own example, the most it can take through a private pension is 50% of that pension income, and anything above that is collected later by Simple Assessment. If income you are not paying tax on, such as a large State Pension, is more than your whole Personal Allowance, HMRC may give your other pension a K tax code.
If you receive a Simple Assessment letter before 31 October 2026 for the 2025/26 tax year, you must pay by 31 January 2027. Letters sent on or after 31 October 2026 must be paid within 3 months of the date on the letter. If you think the figures are wrong, contact HMRC within 60 days.
Worked examples for 2026/27
Margaret is an invented pensioner who gets the full new State Pension of £241.30 a week and has no other taxable income. Her yearly income is £12,547.60, which is £22.40 under the Personal Allowance, so she pays no Income Tax in 2026/27 and should not get a Simple Assessment bill for this year.
George is an invented pensioner with the full new State Pension and a workplace pension of £6,000 a year. His total income is £18,547.60, so £5,977.60 is taxable at 20%, a bill of £1,195.52 for the year. Because his State Pension uses almost all of his allowance, nearly all of that tax comes off his workplace pension through his tax code, which can make that pension look heavily taxed even though the tax is really on both.
HMRC gives the example of someone with a State Pension of £16,000 a year, because of Additional State Pension, and a private pension of £1,500. After the £12,570 allowance they pay 20% on £4,930, a total of £986. Only £750, which is 50% of the private pension, can be taken through the tax code, so HMRC sends a Simple Assessment after the tax year to collect the remaining £236.
Pat is an invented pensioner who put off claiming the full new State Pension for 52 weeks. GOV.UK says that adds £13.99 a week, so Pat now gets £255.29 a week, or £13,275.08 a year. That is £705.08 over the allowance, so Pat owes £141.02 in tax for the year even with no other income. The extra from deferring is taxable, and because it is an increment, the government's planned easing for State Pension-only pensioners described below would not cover Pat.
Scotland, couples and other allowances
If you live in Scotland, Scottish Income Tax applies to your pensions, including the State Pension. The Personal Allowance is the same £12,570, but the first slice above it is taxed at the 19% starter rate on income from £12,571 to £16,537. George from the example above would pay £1,155.85 in Scotland rather than £1,195.52.
Couples where one partner's income is below the Personal Allowance can often save with Marriage Allowance. It lets the lower earner transfer £1,260 of their allowance to a husband, wife or civil partner who pays basic rate tax, cutting their tax by up to £252 a year, and you can backdate a claim to 6 April 2022. If either of you was born before 6 April 1935, Married Couple's Allowance may be worth more. Blind Person's Allowance also adds to your tax-free income if you qualify.
How to check your tax code and get a refund
Your tax code tells your pension provider or employer how much tax to take. You can check your Income Tax for the current year online or in the HMRC app to see your tax code, your Personal Allowance and how much tax you are likely to pay. HMRC may change your code when your weekly State Pension amount changes, which normally happens each year when it goes up.
If your tax code is wrong, it is usually because HMRC has incorrect or missing information, so update your details through GOV.UK rather than waiting. At the end of each tax year HMRC checks what you paid and, between June and March of the following tax year, sends a tax calculation letter (P800) if you paid too much or too little, or a Simple Assessment if you owe tax on your State Pension. A P800 refund can be claimed online by bank transfer.
Overpayments do happen. If you think you paid too much and have not had a letter, you can claim a tax refund. Our report on pensioners overcharged after an HMRC error shows what to look for.
What the government has said about State Pension-only pensioners
In the Budget on 26 November 2025 the government said it will ease the 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 through Simple Assessment from 2027-28 if the State Pension goes above the Personal Allowance from that point. It said it was exploring the best way to do this and would set out more detail.
Read the wording carefully. It covers people whose only income is the basic or new State Pension, with no increments from deferring. Anyone with a works or private pension, earnings or Additional State Pension, and anyone who deferred, is still expected to pay tax in the usual way. The April 2027 State Pension rise is normally announced in the autumn, and we will update this guide when both the rate and the details of the 2027-28 change are confirmed. For the political debate over future increases, see Burnham ends triple lock from 2030.
Frequently asked questions
Do I pay tax if the State Pension is my only income?
Not in 2026/27 if you get the full new State Pension or less. The full rate is £12,547.60 a year, which is £22.40 under the £12,570 Personal Allowance. If your State Pension is higher, for example because of Additional State Pension or deferring, HMRC may send a Simple Assessment bill after the tax year ends.
Is tax deducted from my State Pension before it is paid?
No. The State Pension is always paid in full, with no tax taken off. Any tax due on it is collected through the tax code on another pension or a job, or by a Simple Assessment bill if you have no other income that tax can be taken from.
Do I still pay National Insurance after State Pension age?
If you are employed, you stop paying Class 1 National Insurance when you reach State Pension age, even if you keep working. If you are self-employed, you stop paying Class 4 National Insurance from the 6 April after you reach State Pension age. Income Tax still applies to your wages or profits and your pensions if the total is over £12,570.
How is the State Pension taxed?
It is added to your other taxable income for the tax year, and the total above the £12,570 Personal Allowance is taxed at the normal rates, starting at 20%, or at the 19% starter rate in Scotland. HMRC usually collects the tax through the tax code on a private pension or job, or by Simple Assessment.
Does the State Pension use up my Personal Allowance?
Yes. Because it is taxable, the State Pension counts towards your £12,570 Personal Allowance first. The full new State Pension uses all but £22.40 of it in 2026/27, so almost any other taxable income, such as a works pension, is taxed from the first pound at 20%.
Is extra State Pension from deferring taxable?
Yes. GOV.UK says any extra payments you get from deferring could be taxed. Extra weekly State Pension from deferring is added to your income each year, just like the rest of your pension. The planned 2027-28 easing for State Pension-only pensioners does not cover pensions with increments.
Will pensioners have to pay tax on the State Pension from April 2027?
Under current plans the full new State Pension is likely to pass the frozen £12,570 allowance in April 2027. The government said in the 2025 Budget that people whose only income is the basic or new State Pension, without increments, will not have to pay those small amounts through Simple Assessment from 2027-28.
Sources
- GOV.UK, Tax when you get a pension, accessed 2 October 2026
- GOV.UK, Income Tax rates and Personal Allowances, accessed 2 October 2026
- GOV.UK, The new State Pension: what you'll get, accessed 2 October 2026
- Department for Work and Pensions, Benefit and pension rates 2026 to 2027, accessed 2 October 2026
- HM Treasury, Budget 2025, accessed 2 October 2026
- HMRC, Understand your Simple Assessment tax bill, accessed 2 October 2026
- HMRC, Pay your Simple Assessment tax bill, accessed 2 October 2026
- HMRC, Tax codes, accessed 2 October 2026
- GOV.UK, Defer (delay) your State Pension, accessed 2 October 2026
- HMRC, Tax overpayments and underpayments, accessed 2 October 2026
- GOV.UK, Income Tax in Scotland, accessed 2 October 2026
- GOV.UK, Marriage Allowance, accessed 2 October 2026
- GOV.UK, National Insurance: when you stop paying, accessed 2 October 2026
- GOV.UK, Tax-free and taxable state benefits, accessed 2 October 2026
How we check this guide. Every figure is checked against the official sources listed above, and the guide is updated when rates or rules change.
