Hike to UK state pensions will bring retirees into tax net

UK prime minister Keir Starmer with Chancellor Rachel Reeves. Photo: PA

Britain's pensioners are set to pay tax on their state retirement benefit from 2027 after official earnings data confirmed that the state pension will rise by an inflation-busting 4.7pc next April.

The uprating means Britons over the age of 66 will get a £561.60 (€647.18) increase in their retirement income to £12,534.60 from April, putting them on course to pay tax from 2027 unless the government raises their tax-free personal allowance. It would be the first time in history that the state pension incurs income tax.

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