State pension update from HMRC as retirees 'become liable' for tax raid

Patrick O'Donnell
Fri, 03 Apr 2026 10:07:51 +0000

HM Revenue and Customs (HMRC) has issued an update to those claiming the state pension about any potential tax liability they may face in the new financial year.

Thanks to the triple lock, state pension recipients are now receiving higher payments following a 4.8 percent uplift that comes into effect this month.

The full new state pension has risen from £230.25 to £241.30 weekly, marking one of the most substantial increases since the triple lock mechanism was established in 2011.

As such the tax authority has released guidance confirming that state pension payments arrive without any tax deductions taken at source.

HMRC clarified that the Department for Work and Pensions (DWP) distributes these payments directly, with recipients seeing the full amount deposited into their bank accounts.

Those claiming the full basic state pension will now receive £184.90 weekly. Payments are distributed every four weeks rather than monthly, meaning those on the full new state pension will receive £965.20 per payment period.

The DWP sends these payments in arrears, with the specific day of receipt determined by the final two digits of a person's National Insurance number.

Those whose National Insurance numbers end in 00 to 19 can expect their money on Mondays, while digits 20 to 39 correspond to Tuesdays.

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Wednesday payments apply to numbers ending 40 to 59, with Thursday allocated to 60 to 79. Recipients whose numbers conclude with 80 to 99 will see funds arrive on Fridays.

Looking further ahead, legislation already exists for an additional increase that will push the qualifying age to 68 during the period from 2044 to 2046.

Those approaching retirement can verify their expected payments through the Government's online forecast tool, which calculates projected entitlements based on National Insurance contributions.

The annual increase has brought the new state pension to within £23 of the £12,570 personal allowance threshold, raising questions about future tax liability.

Kate Smith, Head of Pensions at Aegon, said: "Should the amount cross this threshold when it increases again next year, a portion of the state pension would become liable to the basic 20 per cent rate of income tax."

She noted that even a minimum 2.5 percent rise would push the annual total to £12,861, creating a £58 tax bill.

Chancellor Rachel Reeves has stated that those relying solely on state pension income will not face income tax during this parliament, though Smith called for clarity on how this would be implemented administratively.