Is the State Pension taxable?
Yes, but it is paid with no tax taken off. How HMRC collects the tax through your tax code, a K code or a Simple Assessment, with 2026/27 figures.
This page is general information, not advice.
Taxable, but paid gross
Yes, the State Pension is taxable. HMRC's own guidance, How your State Pension is taxed, puts it in one line: "Your State Pension is taxable income, but tax is not taken off before you get it." The charge itself is in section 577 of the Income Tax (Earnings and Pensions) Act 2003, which covers the State Pension paid under the Social Security Contributions and Benefits Act 1992 and the Pensions Act 2014.
Every part of it counts. GOV.UK's Tax when you get a pension lists the basic State Pension, the new State Pension and Additional State Pension as income you may pay tax on. If you paid into the Additional State Pension before 2016 and would have got more under the old rules, the protected payment on top of your new State Pension is part of your State Pension too. Extra State Pension from deferring is taxable as well: GOV.UK's deferral guide says "Any extra payments you get from deferring could be taxed."
The tax is worked out on what you were entitled to over the tax year, not on what reached your bank. For someone who started on or after 6 April 2010, HMRC counts a full year as one week at the weekly rate before the April increase plus 51 weeks at the rate after it, using the figures on your DWP letter (HMRC). If your State Pension started part way through the year, HMRC multiplies your weekly rate by the weeks left in the tax year from your entitlement date.
How the State Pension compares with the Personal Allowance in 2026/27
DWP's benefit and pension rates for 2026 to 2027 set the full new State Pension at £241.30 a week and the full basic State Pension at £184.90 a week. The Personal Allowance is £12,570, fixed at that figure up to and including 2030-31 by section 10 of the Finance Act 2026.
| 2026/27 | Full new State Pension | Full basic State Pension |
|---|---|---|
| Weekly rate | £241.30 | £184.90 |
| 52 weeks at that rate | £12,547.60 | £9,614.80 |
| Taxable amount for a full year (HMRC 1 + 51 weeks) | £12,536.55 | £9,606.35 |
| Personal Allowance left over (52 weeks) | £22.40 | £2,955.20 |
The 1 + 51 week row uses the 2025/26 rates of £230.25 (new) and £176.45 (basic) for the first week, as HMRC's method describes for someone receiving the State Pension for the whole tax year.
So the full new State Pension on its own sits £22.40 under the allowance, about £0.43 a week. Someone whose only income is exactly the full new rate pays no Income Tax in 2026/27. A pensioner who does get a tax bill on their State Pension this year either gets more than the full rate or has some other income on top: a protected payment, Additional State Pension with the basic State Pension, extra State Pension from deferring, or any savings interest, rent or earnings. Any of those can take the total over the allowance.
When your State Pension and other income together go over the allowance, the part above it is taxed at your normal rates: 20% basic rate in England, Wales and Northern Ireland, while Scottish taxpayers pay the 19% starter rate on the first £3,967 above the allowance and the Scottish rates above that (GOV.UK Income Tax rates). Because nothing is deducted from the State Pension itself, the tax on it has to be collected from somewhere else, which is what the next section covers.
How HMRC collects tax on the State Pension
If you have a job or a private or workplace pension: your tax code
HMRC "will usually change your tax code so the tax due is collected from your wages or other pensions" (HMRC). GOV.UK's Tax when you get a pension adds that if you have more than one pension provider or employer, only one of them takes the tax for the State Pension, and each can have its own tax code. At the end of the year the provider's P60 shows the tax you paid.
The code works by taking the State Pension off your allowance. To build a tax code, HMRC starts with your Personal Allowance, takes off income you have not paid tax on, and then replaces the final digit with a letter (GOV.UK). So a private pension code with a small number, such as the one in the first example below, is normal for someone on close to the full new State Pension: almost all of the allowance has been used by the State Pension.
K codes. When the State Pension is more than your allowance, there is no allowance left to give the private pension, so HMRC uses a K code. GOV.UK's K in your tax code says a K means "you have income or deductions which are higher than your tax-free Personal Allowance and are not already being taxed", and lists getting the State Pension or taxable state benefits as an example. The K code adds that untaxed amount to the pay or pension it is used on, so the tax on it is collected there. There is a limit: "Employers and pension providers cannot take more than half of your pre-tax wages or pension when using a K tax code."
Your code can change during the year. GOV.UK's why your tax code might change lists "your weekly State Pension amount changes" as one reason, and GOV.UK's emergency tax codes page says you might be put on an emergency code when you start getting the State Pension. You can see the code and the State Pension figure HMRC is using in the Check your Income Tax service, and decode it with our tax code explainer (the K code page covers the K prefix).
If the State Pension is your only income, or the code could not collect it all: Simple Assessment
GOV.UK is direct about this: "If you go over your Personal Allowance and you have tax to pay on your State Pension, HMRC will send you a Simple Assessment tax bill" (Tax when you get a pension). HMRC also sends one when it was "unable to collect the tax due through your tax code", after the end of the tax year (HMRC). The 50% limit on K codes is a common cause: a small private pension cannot carry all the tax on a large State Pension.
A Simple Assessment (also called a PA302) is a bill HMRC has already worked out. You do not fill in a return. It is a different letter from a P800 tax calculation: GOV.UK's tax overpayments and underpayments guide says you might get a Simple Assessment if you owe tax that cannot be taken out of your income automatically, owe HMRC a large amount, or "have to pay tax on your State Pension". On the size point, that page says "more than £3,000", while GOV.UK's if you owe tax page says HMRC collects through your tax code automatically when you "owe less than £3,000". The letters go out between June and March after the tax year ends.
If you file Self Assessment, you put your annual State Pension entitlement on your tax return and any tax still owing is settled through the return (HMRC). GOV.UK says people registered for Self Assessment do not get a P800 or a Simple Assessment letter (GOV.UK).
Worked examples
Both examples use 2026/27 rules, outside Scotland unless stated, with no other income, no Marriage Allowance and no other deductions.
1. Full new State Pension plus a £6,000 private pension
- Taxable State Pension, HMRC's 1 + 51 week basis: £230.25 + 51 × £241.30 = £12,536.55.
- Allowance left for the private pension: £12,570 − £12,536.55 = £33.45. Dropping the pence and replacing the final digit with a letter gives a tax code of 3L on the private pension.
- Total income £18,536.55, less the £12,570 allowance, leaves £5,966.55 taxable. At 20% that is £1,193.31 due for the year, nearly all of it collected from the private pension through the 3L code (see below).
- A Scottish taxpayer pays £1,153.64 on the same income, because the first £3,967 above the allowance is taxed at the 19% starter rate.
PAYE does not collect exactly that. A 3L code gives £39 of tax-free pay for the year (the code number × £10, plus £9, under HMRC's specification for PAYE tax table routines), so the private pension has 20% tax taken on £5,961: £1,192.20. That is £1.11 less than the £1,193.31 due, because the code drops the pence and the last digit of the allowance. After the year HMRC compares what you paid with what you owed, and if you paid too little it sends a P800 or a Simple Assessment (GOV.UK). This assumes HMRC had the right State Pension figure in the code.
2. State Pension above the allowance plus a £600 private pension
Say your DWP letter shows a taxable State Pension of £14,000 for the year, for example basic State Pension with Additional State Pension. That is an illustration, not a rate.
- The State Pension alone is £1,430 over the £12,570 allowance, so the private pension gets a K code.
- Tax due for the year: (£14,000 + £600 − £12,570) × 20% = £406.00.
- The K code cannot take more than half of the pre-tax private pension: £300.00.
- The remaining £106.00 is collected by Simple Assessment after the tax year.
GOV.UK's own example in Understand your Simple Assessment tax bill works the same way: a pensioner with a £16,000 State Pension (including Additional State Pension) and a £1,500 private pension paid £750 through the tax code, which GOV.UK says "is 50% of your private pension income, which is the maximum amount of tax that can be collected through your tax code", and the rest by Simple Assessment.
Deferral: extra State Pension, arrears and lump sums
Reached State Pension age on or after 6 April 2016. You can take what you deferred as a one-off arrears payment of up to 52 weeks, as increased regular payments, or both, and the arrears payment has no interest added (GOV.UK). The increased payments are extra State Pension and count as income like the rest of it.
Reached State Pension age before 6 April 2016. After deferring for at least 12 months you can take a one-off lump sum that includes interest at 2% above Bank of England base rate (GOV.UK). This lump sum is taxed differently from the weekly pension. Under section 7 of the Finance (No. 2) Act 2005 it is treated as income but is not taken into account in working out your total income, so it does not push your other income into a higher band. Instead it is taxed at a single rate fixed by your other taxable income for the year after allowances (the Act's "Step 3 income"): 0% if that is nil, the basic rate if it is within the basic rate limit, and the higher or additional rate above that. Scottish and Welsh taxpayers have their own versions of the rule in the same section.
No National Insurance on the State Pension
National Insurance is not charged on pensions. Of the contribution classes in section 1(2) of the Social Security Contributions and Benefits Act 1992, the ones charged on income are Class 1, on employees' earnings, and Class 4, on the profits of a trade, profession or vocation. A pension is neither. GOV.UK's National Insurance and tax after State Pension age says that even if you keep working, you usually stop paying National Insurance at State Pension age; the self-employed stop paying Class 4 from the 6 April after it. Income Tax carries on regardless: you pay it if your taxable income, "including your private pension and State Pension", is more than your allowances.
The Pension Tax Allowance from 2027/28: announced, not yet law
The Personal Allowance is fixed while the State Pension goes up each April, and the government's own 2027-28 figure for the Pension Tax Allowance threshold (below) is already above the allowance. The government has announced a fix twice. Neither is law yet, and neither changes the 2026/27 tax year or any earlier year.
- Budget 2025 (November 2025), section 5.10. The Budget 2025 document said the government would ease the burden "for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28", and that it was "exploring the best way to achieve this and will set out more detail next year". That was a statement of intent, with no mechanism.
- Budget 2026 (28 October 2026), OOTLAR section 1.4. HMRC's overview of tax legislation and rates says the government "will introduce legislation in Finance Bill 2026-27 to implement the Pension Tax Allowance". It is for pensioners "whose total income is up to the value of the full new State Pension", it is available in 2027-28, 2028-29 and 2029-30, and it takes effect from 6 April 2027. Its value is the basic rate (20%) applied to the difference between the full new State Pension and the Personal Allowance, and for income above the full new State Pension it is withdrawn at £1 for every £3 of income above that level. The Budget 2026 report (paragraph 6.182) adds three conditions: it is for "individuals over State Pension age", it works as an "automatic tax deduction" if their income "regardless of source" is at or below the value of the full new State Pension, and it "will be uprated in line with the full new State Pension across this Parliament". It runs from 6 April 2027 until 5 April 2030, and the government "will consider arrangements beyond April 2030 in the usual way". Annex A gives, for 2027-28, an eligibility threshold of £13,037 below which the full allowance applies and £13,319 as the point at which it is fully removed. Those are HMRC's published figures; this page does not recalculate them.
Two things follow. First, the 2026 design is wider than the 2025 announcement: it is tested on total income, not on the State Pension being your only income, and it is withdrawn gradually above that level, which the 2025 announcement did not mention. Second, as at 28 October 2026 it is a measure the government intends to put in the Finance Bill, which Parliament has not yet passed, so the detail can change. Simple Assessments for 2025/26 now arriving, and for 2026/27, are due in the normal way. This page will be updated when the legislation is published.
How to check or challenge a Simple Assessment
- Check the State Pension line against your DWP letter, using the 1 + 51 week rule above, not the payments in your bank account (HMRC).
- Check the other income and the tax already paid against your P60 from each pension or job, and your bank statements for interest (GOV.UK).
- If a figure is wrong, tell HMRC within 60 days of the date on the bill, saying which amounts are wrong and what they should be (GOV.UK).
- If it is right, pay by the deadline using the 14-character reference starting with X. For 2025/26, a letter you got before 31 October 2026 is due by 31 January 2027, and one dated on or after 31 October 2026 is due within 3 months of the date of the letter (GOV.UK).
The full step-by-step, with payment details and what to do if you cannot pay, is in our guide how to check and pay a Simple Assessment. To stop the same thing happening next year, check that the tax code on your private pension includes the right State Pension figure; our guide to reading a PAYE coding notice shows where it appears.
Related
- UK State Pension guide - qualifying years, rates and top-ups.
- State Pension calculator - estimate what you will get.
- How to defer your State Pension - including tax on the extra.
- Pension drawdown calculator - tax on private pension withdrawals.
- Budget 2026 summary - the other measures announced on 28 October 2026.
Frequently asked questions
Is the State Pension taxable income?
Yes. HMRC says the State Pension is taxable income but tax is not taken off before you get it. It is added to your other income, and you pay Income Tax only if the total is more than your Personal Allowance, which is £12,570 in 2026/27. The basic State Pension, the new State Pension, Additional State Pension and a protected payment all count.
Do I pay tax if the full new State Pension is my only income in 2026/27?
No. The full new State Pension is £241.30 a week in 2026/27, £12,547.60 over 52 weeks, which is £22.40 below the £12,570 Personal Allowance. You would only owe tax if you get more than the full rate, for example through a protected payment, Additional State Pension or extra State Pension from deferring, or if you have other taxable income.
Why does my pension tax code have a K in it?
A K code means you have income or deductions that are more than your Personal Allowance and are not already taxed. GOV.UK gives getting the State Pension or taxable state benefits as an example of when this can happen. The K code makes your private pension or job collect the tax on the State Pension too, but the payer cannot take more than half of your pre-tax pension or wages in tax.
Why have I got a Simple Assessment letter about my State Pension?
Because HMRC could not collect the tax through a tax code. GOV.UK says that if the State Pension is your only income and you go over your Personal Allowance, HMRC sends a Simple Assessment tax bill. You also get one if your private pension or wages were too small to collect it all. You have 60 days from the date on the bill to tell HMRC if a figure is wrong.
Will pensioners stop paying tax on the State Pension from April 2027?
Not exactly, and it is not law yet. Budget 2026 says Finance Bill 2026-27 will create a Pension Tax Allowance for 2027/28 to 2029/30 so that pensioners whose total income is up to the full new State Pension do not have to pay small amounts of tax through Simple Assessment. It is withdrawn above that level and does not change the 2025/26 or 2026/27 tax years.
Do I pay National Insurance on my State Pension?
No. National Insurance contributions are charged on earnings from employment and on self-employed profits, not on pensions. GOV.UK also says most people stop paying National Insurance once they reach State Pension age, even if they keep working, although Income Tax still applies to wages, pensions and other income.