From April 2026, the State Pension will increase by 4.7%, providing pensioners with an annual boost of £560. This will bring the full new State Pension to approximately £12,534 per year, just £36 below the frozen personal tax allowance of £12,570.
This increase offers relief for retirees battling inflation, but it also raises concerns about tax liability, as the pension is edging closer to the tax threshold.
Why the Triple Lock Matters
The increase comes under the triple lock guarantee, which ensures the State Pension rises each year by the highest of:
- Inflation (Consumer Price Index)
- Average wage growth
- 2.5% minimum
For 2026, average wage growth of 4.7% was the highest figure, setting the rate of increase.
Breakdown of Pension Increases
| Pension Type | Current Weekly Rate | New Weekly Rate (April 2026) | Current Annual Amount | Projected Annual Amount |
|---|---|---|---|---|
| New State Pension (post-2016) | £230.25 | £241.05 | £11,973 | £12,534.60 |
| Basic State Pension (pre-2016) | £176.45 | £184.75 | £9,175 | £9,607 |
The rise benefits both new pensioners and those on the basic state pension, though the gap between the pension and personal allowance creates a challenge.
Impact on Income Tax
The personal allowance remains frozen at £12,570 until at least 2028. With the state pension climbing rapidly, many retirees risk being pulled into the income tax net.
- Pensioners relying solely on the State Pension will avoid tax in April 2026.
- However, even modest private pensions, savings interest, or benefits could push total income over the threshold.
- By April 2027, forecasts suggest the State Pension will exceed the personal allowance, meaning some pensioners will pay income tax even without additional income.
Who Will Be Most Affected?
- New State Pension recipients (retired after 2016) will be the closest to breaching the tax threshold.
- Basic State Pension recipients are further below but may already pay tax if they receive State Second Pension (S2P/Serps) or private pension top-ups.
- Pensioners with multiple income streams — such as private pensions or savings interest — are most vulnerable to crossing the threshold.
Government’s Dilemma
The frozen allowance, combined with annual triple lock increases, places the government in a tight spot.
- Raising the personal allowance would ease pressure on pensioners but reduce Treasury revenues.
- Changing or scrapping the triple lock could save money but would risk strong political backlash.
- Pension experts warn that the system is on track to make every new State Pension recipient a taxpayer by 2027.
The £560 increase in April 2026 offers financial relief but pushes the State Pension dangerously close to the £12,570 tax threshold.
Unless allowances rise, more retirees will face tax bills in coming years. Pensioners should prepare by reviewing their income sources and seeking advice to manage future liabilities effectively.
FAQs
How much will the State Pension rise in April 2026?
The full State Pension will increase by 4.7%, adding £560 per year and bringing the annual total to around £12,534.60.
Will pensioners start paying income tax after the rise?
Not in April 2026, but with the allowance frozen, many pensioners with even modest extra income will cross the threshold. By 2027, the State Pension alone is expected to exceed the allowance.
Does the rise apply to both new and basic State Pensions?
Yes, both will increase by 4.7%. The new State Pension will rise to £241.05 per week, while the basic pension will reach £184.75 per week.
