Starting April 2025, the full UK State Pension will increase by £470 per year, bringing the total to £11,973 annually. While this is a welcome rise under the Triple Lock system, many pensioners are now worried they will be taxed on their pension income, especially with the personal tax allowance frozen at £12,570.
A petition with over 79,000 signatures is now urging the UK government to make State Pension tax-free, as more elderly citizens are being pulled into the tax system despite living on limited income.
What’s Changing in April?
From next month, pensioners receiving the full State Pension will get:
- An increase of £470 per year
- A total of £11,973 per year, just £597 below the tax-free threshold
Because the personal tax allowance is frozen at £12,570, pensioners with any additional income—like private pensions or interest on savings—could end up paying income tax.
Why Are Pensioners Worried?
Many retirees say they are being unfairly taxed on income that they have already paid into during their working years through National Insurance.
Key Concerns:
- The personal tax allowance has been frozen since 2021
- By 2026, the State Pension alone could cross the tax threshold
- Pensioners with small private pensions are now being taxed for the first time
- Added financial pressure due to loss of Winter Fuel Payment and rising living costs
A Widow’s Real-Life Story
The petition was started after a 75-year-old widow named Colette shared her experience:
- She is taxed on her late husband’s pension and her own State Pension
- Her income exceeds the tax threshold by just £1,000
- Even her small NHS pension of £37 per month is taxed
- She has also lost her Winter Fuel Payment
Campaign group Silver Voices, led by Dennis Reed, is backing the petition and calling for urgent reform.
What Does the Petition Demand?
The petition is asking the government to:
- Make the State Pension tax-free
- Ensure pension increases are not lost to taxation
- Debate this issue in Parliament, especially as support crosses 100,000 signatures
What Happens Next?
- At 10,000 signatures, the UK Government must respond
- At 100,000 signatures, the issue may be debated in Parliament
If nothing changes, many pensioners fear that future pension increases will be wiped out by tax, reducing the impact of the Triple Lock and making retirement harder for those on modest incomes.
While the £470 increase in State Pension from April 2025 is meant to help older citizens manage rising costs, it may also push them into paying tax, especially if they have even small extra income.
With the tax threshold frozen, many argue that pension income should be fully tax-free, as it has already been funded through National Insurance. As the petition gains traction, all eyes are now on Parliament to see if change is coming.
FAQ’s
How much is the UK State Pension increasing in April 2025?
The full UK State Pension will increase by £470 per year, bringing the total to £11,973 annually.
Why are pensioners worried about tax after the pension rise?
The personal tax allowance is frozen at £12,570, so the State Pension plus any extra income could push pensioners into paying income tax.
What is the current personal tax allowance in the UK?
The personal tax allowance is currently £12,570 and has been frozen since 2021. It is not expected to increase until 2026.
What does the pension tax petition demand?
The petition asks the UK government to make the State Pension tax-free, as pensioners have already paid for it through National Insurance.
When will the government respond to the pension petition?
At 10,000 signatures, the government must respond. At 100,000 signatures, the petition could be debated in Parliament.
