𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Martin Lewis has issued a message about a key thing he’ll be looking out for in next week’s Budget about State Pensioners. John Healey will deliver his first Budget as Chancellor on Wednesday, October 28, and faces the difficult task of working within Britain’s constrained fiscal resources whilst looking for measures that boost economic growth. Mr Lewis, a personal finance guru and founder of MoneySavingExpert.com, says he will be looking for further detail about a scheduled change to the State Pension. The full rate of the new State Pension is currently £241.30 a week, though the amount you get may differ depending on various factors. These include: you were contracted out before 2016; the number of National Insurance qualifying years you have; and if you paid into the Additional State Pension before 2016, the GOV.UK website explains.

Under the triple lock commitment, the State Pension rises by one of three measures annually: wage growth; inflation; or 2.5% – whichever is highest. This week it was confirmed that the State Pension would rise by 3.9% when it’s uprated in April next year, based on wage growth figures for the May to July period of 2026, which were confirmed to outstrip inflation.

Years of increases mean from April, the annual rate for those with full entitlement will rise to around £13,040. It means for the first time the State Pension is higher than the £12,570 tax-free personal allowance, which has been frozen for more than five years.

It raised concerns that pensioners who had saved up all their lives and relied on the pension would ironically start to lose out due to the uprating. The Government confirmed that older people solely living off their State Pension wouldn’t be taxed on income in excess of the allowance. More information will be provided in the Budget, the Treasury said.

Mr Lewis included it in a list of things he’ll be keeping a close eye on. Writing on X, he said: “We now know someone who ONLY gets the full new state pension won’t pay tax. But it’s very important we understand the mechanism.

“For example, if someone has just £10 a year of other earnings, will they still have to pay tax? If so, that £10 of earnings will effectively cost them about £100 – the tax they’d pay without the exemption.”

A Treasury spokesperson said: “In line with the commitment made at Budget 2025, pensioners who only just the exceed the personal allowance will not have the administrative burden of paying small amounts of tax in this Parliament. The Chancellor will set out further details on how that commitment will be delivered at the Budget.”