Exact date state pensioners will start to pay tax after Triple Lock hike

The exact date state pensioners will start paying tax after a Triple Lock rise has been revealed. State pensioners will soon have to start paying tax on their state pension cash after the government confirmed its commitment to the triple lock in last week's Labour Party Budget.

Annual rises combined with a freeze to tax thresholds will see payments surpass the tax-free personal allowance for the first time. Hundreds of thousands of pensioners who get the full new state pension - currently worth £11,502.40 a week - will be dragged into paying tax on this income alone from April 2027 for the first time.

The state pension will rise to £11,973 from April 2025, in line with a 4.1% rise in wages. The following years from April 2026 and April 2027, the benefit is expected to rise by 2.5% based on the economic outlook. It would take payments to £12,272 in 2026 and then £12,578.80 in 2027 - surpassing the £12,570 a year standard tax-free personal allowance for the first time.

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Steve Webb from the Liberal Democrats said: "As things stand, your company pension and other taxable income are below the tax-free personal allowance of £12,570. This means that your private pension provider is paying your pension without deducting any income tax.

"As you have worked out, once you start receiving your state pension, this will change. Although state pensions count as taxable income, they are always paid gross – that is, without the deduction of any income tax." Sir Steve said: "The good news is that the Pay-As-You-Earn (PAYE) system should come into play and ensure that the right amount of tax is collected over the course of the year without further action on your part.

"What happens is that DWP (which pays your state pension) will notify HMRC how much state pension it is paying you. HMRC will know about your private pension from information supplied to it by your pension provider and will be able to see that you are now a taxpayer.

"HMRC should then issue a new 'tax code' to your private pension provider requiring it to start deducting income tax before your private pension is paid."