State pension warning as two rules change under Andy Burnham

State pension warning as two rules change under Andy Burnham State pensioners face losing all of their tax exemption. Share Article Share Article Facebook X LinkedIn Reddit Bluesky Email Copy Link Link copied Bookmark Add us as preferred source Comments By Alex Evans , Deputy Audience Editor 08:41, Sun, Oct 18, 2026 Andy Burnham and John Healey could create a 'cliff edge' in the state pension (Image: Getty) Prime Minister Andy Burnham has been warned over a state pension ‘cliff edge’ that threatens to rob retirees of income. Money expert Martin Lewis has set out a key question to new Chancellor John Healey as he looks set to implement two of Rachel Reeves ’ policies in less than six months’ time, without much in the way of detail about how exactly it’s going to work. Article continues below ADVERTISEMENT As reported by the Express, we know that state pensioners who receive only their state pension payments from the DWP will not be made to pay tax on their state pension, as long as they receive no other income. This will come into effect when the full, new state pension for those with a full National Insurance record passes the £12,570 Personal Allowance tax threshold for the first time, which, thanks to the next triple lock increase, is due to do from April 2027. 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 . Statements from HM Treasury about this tax exemption suggest that state pensioners who receive ‘any other income’ will be made to pay tax, suggesting that it is a ‘cliff edge’ - even a few pounds of income or private pension will cause the tax exemption to be lost and result in a tax bill. Article continues below ADVERTISEMENT Now, money man Martin Lewis has directly asked John Healey for clarification on how this will work. Article continues below ADVERTISEMENT He said: “An important question for @JohnHealey_MP. Next April “Full new State Pension will likely rise to £13,040/yr “Tax-free personal allowance frozen at £12,570/yr “So the full new State Pension would normally attract tax. Yet you've said you'll honour former Chancellor Rachel Reeves' promise that those whose ONLY income is the State Pension won't pay tax. “But will that be a cliff edge? “If someone gets say just £30/yr from a tiny pension from an old job, would they lose that protection and face around £100 in tax for just thirty quid income?” Martin also pointed out that state pensioners face losing their tax exemption due to savings interest, and the question of whether it is lost if the money is still within the Starting Rate for Savings has not been answered. Martin Lewis gives verdict on when petrol and diesel prices and fuel duty cut DWP given new powers to check your bank accounts after rule change He added: “And what about a little savings interest? Even if it's tax-free under the starting rate for savings, would it count as extra income and cost them the tax? “This needs to be thought through when you tell us in the budget.” An HM Treasury spokesperson previously 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 Martin Lewis Andy Burnham Income tax Share Article Share Article Facebook X LinkedIn Reddit Bluesky Email Copy Link Link copied Bookmark Add us as preferred source Comments