Wage growth – used to set triple-lock pension – slows to 3.9%, meaning state pension should hit £13,000 next year
‘Costing billions’: is the pensions triple lock a lifeline or simply unaffordable?
If the state pension rises to £13,000 next year, it will probably breach the UK’s tax-free personal allowance (currently £12,570) – the amount you can earn before paying income tax.
However, pensioners who don’t receive any other income might still be exempt from paying tax if the state pension exceeds the personal allowance.
In the 2025 Budget the government announced the personal allowance would be frozen at its current level up to April 2031.
It also announced that pensioners whose sole income is the basic or new state pension would not have to pay small amounts of tax via simple assessment from 2027/28 if the new or basic state pension exceeded the personal allowance from that point. To date the government has not published any further details of how this is to be done.
“The latest UK jobs numbers suggest the labour market remains subdued. Unemployment was little changed over the summer, but payroll employment and vacancies continued to drop.
“Payroll employment fell 26,000 in August, while…
