The Department for Work and Pensions (DWP) has issued a new reassurance to pensioners regarding the state pension triple lock, amid rising concerns over the impact of frozen tax thresholds on retiree incomes.
This comes as the number of pensioners crossing the income tax threshold continues to rise, primarily due to the frozen personal allowance which hasn’t increased since 2021.
Why Are Pensioners Being Dragged Into Income Tax?
The personal allowance – the amount a person can earn before paying tax – remains fixed at £12,570, despite annual increases in the state pension. As a result, more retirees now find themselves liable for tax, even if their only income is their pension.
Pensions Minister Torsten Bell addressed the issue in the House of Commons, affirming the government’s ongoing commitment to the triple lock policy. The triple lock guarantees that the state pension will increase by whichever is higher: 2.5%, inflation, or average earnings.
Triple Lock Remains in Place Through 2025
Bell reiterated that more than 12 million pensioners are set to benefit from the triple lock, which is projected to raise pension spending by £31 billion, increasing yearly state pension payouts by up to £1,900 over the current Parliament.
“This Government is absolutely committed to supporting pensioners and giving them the dignity and security they deserve in retirement,” he said.
However, concerns persist as many retirees with private pensions or part-time income are now crossing the personal allowance limit and facing tax deductions on their hard-earned retirement income.
Personal Allowance Frozen Until 2028
Bell explained that the previous Government’s decision to freeze the personal tax thresholds until April 2028 is the main cause of the current situation. However, he confirmed that the current Government has opted not to extend the freeze further.
He added, “Pensioners who receive only the basic or new full state pension remain below the threshold and won’t pay any income tax. But those with additional income streams are being affected.”
What This Means for Retirees
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Pensioners relying solely on the full state pension won’t currently be taxed.
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Those with private pensions or other income may find themselves above the £12,570 limit, paying income tax for the first time.
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The freeze on the personal allowance is in effect until April 2028.
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The triple lock is still active and offers some protection against inflation and economic pressures.
FAQs
What is the state pension triple lock?
The triple lock ensures the state pension increases each year by the highest of three metrics: 2.5%, inflation, or average earnings growth.
Why are pensioners paying more tax now?
Because the personal allowance threshold is frozen at £12,570 while state pensions continue to increase, more pensioners are crossing the income tax limit.
Will the triple lock continue in future years?
Yes, according to the DWP’s April 2025 statement, the triple lock will remain in place and benefit over 12 million retirees.
Is the personal allowance likely to increase before 2028?
No. The Government has confirmed that the personal allowance freeze will stay in place until April 2028.
Who is impacted by this frozen threshold?
Pensioners who receive income beyond their state pension—including private pensions, annuities, or part-time work—are more likely to be affected.
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