UK Budget personal allowance for state pensioners with tax exemption from John Healey

UK Budget personal allowance for state pensioners with tax exemption from John Healey John Healey is set to confirm the new rules for state pensioners with a tax exemption and personal allowance tweak. Share Article Share Article Facebook X LinkedIn Reddit Bluesky Email Copy Link Link copied Add us as preferred source Comments By Alex Evans , Deputy Audience Editor 13:44, Mon, Oct 26, 2026 Updated: 13:53, Mon, Oct 26, 2026 Andy Burnham and John Healey have confirmed the tax exemption (Image: Getty) State pensioners will be handed a boosted state pension worth up to £13,036 each year, tax free thanks to a new tax exemption set to be confirmed by Chancellor John Healey. Mr Burnham and his Chancellor John Healey will confirm the latest triple lock figures as part of their Budget on Wednesday, October 28, and have already committed to carrying forwards a tax exemption for state pensioners first announced by now-ex Chancellor Rachel Reeves . Article continues below ADVERTISEMENT The triple lock is set to be axed, but not until 2030. It means that next April, the state pension will see an annual rise in April in line with inflation, wages, or 2.5% – whichever is higher as normal. The Office for National Statistics (ONS) said on Wednesday that the rate of Consumer Prices Index (CPI) inflation was 3.5% in September, accelerating from 3.1% in August. But this does not beat the 3.9% wage growth figure that had already been published. This means we now have confirmed Triple Lock calculations with confirmed uplift figures. Get personal finance news, money saving tips and advice plus selcted offers and competitions I would like to receive emails from the Daily Express featuring our latest products, services, offers, and promotions from across the Reach Plc family . Subscribe Invalid email You agree you are 18 or over. We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and third parties based on our knowledge of you. You can unsubscribe at any time. More Info . This would put someone on the full new state pension, so who hit state pension age after April 2016 on course to receive £250.70 per week from next April – up from £241.30 per week currently, if they have a full National Insurance record, or £13,036 per year. Article continues below ADVERTISEMENT State pensioners hit with new savings taxes after Budget State pensioners given £13,036 state pension tax-free under Andy Burnham But with the personal tax allowance planned to be frozen at £12,570 until 2031 unless the freeze is dropped sooner, some pensioners were heading towards being caught in the tax net. Article continues below ADVERTISEMENT That's why the Government has already announced that state pensioners who are wholly dependent on the DWP ’s new state pension payments – with no private pension – or the old “basic” pension, “with no increments” will not have to pay tax even if they break the threshold, keeping another Rachel Reeves policy in place. Many state pensioners will not qualify for this exemption and as such will be liable to pay tax on their state pension, as they always have, as many state pensioners will have a private pension or savings. This is not in itself a new development - the state pension has always been taxable, and households who are, for example, still working, would lose some of their DWP state pension payments to tax once their earnings and state pension were added together and exceeded the £12,570 threshold. This will continue in April, but it will mark the first time that the state pension payments themselves already break the threshold, at £13,036. Further details are anticipated in the Budget this Wednesday as to who will lose the exemption and the loopholes that will allow a pensioner to keep it. We already know that older state pensioners who receive state pension 'increments' such as AP payments, or Second State Pension, will not be allowed to claim the tax exemption. Many older state pensioners already pay tax on the payments they receive from the DWP, even though they have no other income, because the AP payments from the DWP can be up to £230.54 per week, on top of their £184.90 standard state pension payment. HM Treasury has confirmed to the Express that for older basic state pensioners, this exemption will only apply to those who don’t have any ‘increments’, such as the additional pension schemes. An HM Treasury spokesperson said: “Anyone whose only income is the full new or basic state pension without any increments will not pay income tax and we are committed to that over this Parliament. “By keeping the triple lock, 12 million pensioners will see their income rise by up to £470 this year, and they continue to benefit from the highest Personal Allowance in the G7.” State Pension HMRC Triple lock Income tax Share Article Share Article Facebook X LinkedIn Reddit Bluesky Email Copy Link Link copied Add us as preferred source Comments