State pension update as major rules to change in April

It’s not just the state pension amount that will be changing next in a matter of days

Three specific changes will affect the state pension in a matter of days as the new tax year begins. While this time usually brings an increase to state pension payments, this year it will also modify the age at which people claim them and whether they’ll need to repay funds to the Government.

The new tax year is due to start on April 6 and will introduce the revised rate of DWP payments alongside the beginning of the state pension age rise, with roughly 600,000 people collecting these payments becoming liable for Income Tax as a result.

New state pension rates

Both the new and basic state pension rates will climb by 4.8% thanks to the Triple Lock guarantee. This assures pensioners that their income will grow by the highest of three figures; wage growth, inflation or 2.5%.

For this year’s calculations, the 4.8% earnings growth in the UK exceeded inflation which was recorded at 3.8%. Additional welfare benefits including Pension Credit will increase by this 3.8% from April 6 too.

Those claiming the full new state pension may collect around £12,536.55 according to MoneySaving Expert. Nevertheless, this will leave them with less than £34 before breaching their personal allowance threshold.

Income tax

Most people have a personal allowance threshold of £12,570. This figure has stayed frozen for years and is expected to remain at the current level until 2031.

When people earn above their personal allowance within a single tax year, they become liable for an Income Tax bill. Once the updated state pension rates take effect in April, those receiving the full amount alongside additional income — such as a private pension or part-time work — will likely find themselves facing an income tax obligation.

The increasing state pension and frozen personal allowance thresholds are expected to collide next year, but the OBR has estimated that around 600,000 pensioners will already become liable for tax bills during the 2026/2027 tax year.

Chancellor Rachel Reeves has given reassurances that those whose sole income is the state pension will not be subject to Income Tax liability, even should the state pension figure surpass the personal allowance.

State pension age

The state pension age is set to rise gradually from 66 to 67 over the next two years. The staged rollout will begin in April and is expected to affect everyone born between 6 April 1960 and 5 March 1961.

The state pension age marks the earliest point at which you can expect to become eligible for state pension payments. Most people are able to access their personal or workplace pension several years earlier at 55, though this minimum age will also increase to 57 from April 2028.

All those affected by any changes to their State Pension age should receive written notification from the DWP with ample advance warning. Knowing about these changes in advance will allow people to modify their retirement plans appropriately. You can also discover what your state pension age could be by visiting the Gov.UK website.

The site also provides a state pension forecast tool, as the sum received when reaching state pension age will differ from person to person.