Burnham confirms tax exemption for state pensioners
Andy Burnham has confirmed that state pensioners who have no other income will not be taxed on their state pension, saving up to £58 on their tax bills in 2027. The new Prime Minister and his Chancellor John Healey are honouring promises from predecessors Sir Keir Starmer and Rachel Reeves.
How the £58 saving works
The triple lock guarantees a minimum 2.5% increase in April 2027. For a new state pensioner with a full National Insurance record, the annual pension is currently £12,547.60. With a 2.5% rise, it becomes £12,861. As the Personal Allowance is frozen at £12,570 until 2031, the amount above the threshold — £291 — would normally be taxed at 20%, resulting in a £58 bill. However, pensioners with no other income will be exempt from paying this tax.
Policy commitment confirmed
HM Treasury has confirmed that the government is committed to ensuring state pensioners are not dragged into paying tax. An HM Treasury spokesperson 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.”
Older pensioners not covered
The exemption applies only to pensioners with no other income, such as private pensions, savings interest, or rental income. Older state pensioners receiving increments from now-defunct schemes like the Second State Pension (SERPs) will still be taxed on those amounts.
