by Asim Abbas
11 November 2026 
State Pension and tax: do you pay tax on your State Pension?
State Pension and tax: do you pay tax on your State Pension?
The State Pension is taxable income, but it’s paid without tax deducted. Whether you owe tax depends on your other income.
- State Pension is taxable but paid gross
- Full new State Pension is about £12,548 in 2026/27
- Personal allowance is £12,570
- Tax is usually collected through your other pensions
The full new State Pension is now very close to the frozen personal allowance, so even a small private pension or part-time job can mean a tax bill.
This guide explains how State Pension is taxed and how HMRC collects it.
State Pension amounts
The full new State Pension for 2026/27 is £241.30 a week, about £12,548 a year, after a 4.8% triple lock increase. The personal allowance stays frozen at £12,570 until 2031, so the gap is now just £22. Many people on the older basic State Pension, with additional State Pension, already receive more than the allowance.
How the tax is collected
- With a private or workplace pension: HMRC reduces the tax code on that pension to collect tax on the State Pension
- Still working: the tax code on your job is adjusted
- State Pension only: usually no tax, unless it exceeds the allowance
- Self Assessment: if you already file, it’s included on your return
Tax code checker
Check the code on your pension.
Margaret receives the full new State Pension of £12,548 and a workplace pension of £9,000. Her total income is £21,548. Her tax code on the workplace pension is reduced to collect tax on almost all of it, so she pays about £1,796 in tax, 20% of £8,978, through her workplace pension.
Simple Assessment
If your State Pension exceeds your allowance and there’s no other income to collect tax from, HMRC may send a Simple Assessment letter (PA302) with a bill, rather than requiring a tax return. The government has said people whose only income is the basic or new State Pension won’t have to pay small amounts of tax through Simple Assessment, with details still being finalised.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Deferring your State Pension
You can defer claiming to receive a higher amount later. For the new State Pension, it increases by 1% for every nine weeks deferred, about 5.8% a year. This can be useful if you’re still working and paying higher rate tax.
State Pension age
State Pension age is rising from 66 to 67 between 2026 and 2028. Check your date on GOV.UK.
Things to check
- Your tax code on any private pension
- The P800 calculation after the tax year
- Whether you can claim Marriage Allowance
- Whether savings interest is covered by your allowances
See HMRC’s guidance on tax on pensions, our Marriage Allowance guide and our tax code checker.
What should I do next?
State and private.
On your other pension.
After the tax year.
Frequently Asked Questions
Is the State Pension taxable?
Yes, but it is paid without tax deducted.
How much is the full new State Pension in 2026/27?
£241.30 a week, about £12,548 a year.
How is tax collected on the State Pension?
Usually through the tax code on a private pension or wages.
What is a Simple Assessment?
A bill from HMRC for tax it can’t collect through PAYE, without a full tax return.
Can I defer my State Pension?
Yes. The new State Pension increases by about 5.8% for each year you defer.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Ali Imran
I’m Ali Imran, an accountant at Wingate Accountants. I help sole traders, landlords and directors get their returns filed early and accurately, without the last-minute panic.
