UK Chancellor John Healey pledges no income tax on state pensioners

Prime Minister Andy Burnham and Chancellor John Healey confirmed that anyone whose only income is the full new or basic state pension will not be liable for income tax. The Treasury reiterated the pledge first made by former chancellor Rachel Reeves, stating: “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.”

The state pension, currently £12,547 a year, is set to rise under the triple‑lock policy and could soon exceed the frozen personal allowance of £12,570, which has been unchanged since 2021. Experts warn the policy could create a two‑tier system, advantaging pensioners with no other income while those with modest private pensions may face tax.

A separate analysis by the TaxPayers’ Alliance warns that freezing tax‑free thresholds will pull more than one million Britons into higher tax bands in 2026‑27, describing it as “fiscal drag”. The government argues the pledge protects the most vulnerable retirees while broader fiscal pressures remain.