State pensioners are line to be "punished by a stealth tax" in the years to come as the triple lock and the tax policies resulting in fiscal drag clash, experts warn.
Retirees face a looming tax trap as the state pension rises to approximately £12,534.60 annually from April, positioning it merely £35 beneath the frozen personal allowance of £12,570.
This looming payment hikes is coming thanks to the triple lock, which sees retirement benefit rate's rise every year by the highest of either wage growth, inflation or 2.5 per cent.
The 4.7 per cent increase, , which is in line with average wage growth for the three months to July 2025, means countless pensioners will find themselves on the precipice of tax liability for any supplementary income they receive.
State pensions alone will be liable to pay tax from next year, experts warn
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Nigel Green, the chief executive of deVere Group, cautions that this seemingly positive adjustment conceals a significant issue. "The state pension is now almost level with the personal allowance," he states.
Even minimal additional earnings from private pensions, interest on savings or taxable benefits could thrust retirees into the tax system.
This triple lock mechanism continues to push pension values upward while the personal allowance remains static until at least 2028.
"If nothing changes, the state pension will overtake the personal allowance entirely within a few years," Mr Green explained.
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People preparing for retirement are concerned over what their savings will eventually look like | PA"That would make every pound of additional income taxable for millions."
Mr Green characterised this phenomenon as a "stealth tax" that "punishes those who planned responsibly and undermines confidence in retirement planning".
He emphasised that the Government gains from this disparity, noting: "Freezing the allowance is an invisible tax rise. It lifts revenue without headlines, but it falls hardest on those with fixed incomes—the very group the triple lock was supposed to protect."
In light of this information, Mr Green has advocated for immediate Government intervention, suggesting authorities should "either raise the personal allowance in step with the state pension or conduct a transparent review of the triple lock".
He warns that without changes, "what was meant to shield older people from inflation will steadily drain their income".
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For retirees, Mr Green recommends taking action before the new tax year arrives. "Review finances before the new tax year. Use ISA allowances and time pension withdrawals carefully. Waiting for a tax bill is too late," he advises.
The April increase delivers over £560 annually, though higher-rate taxpayers may see this reduced to approximately £330 after tax deductions.
"What should be a welcome boost risks becoming a net loss. This is not a distant concern. It begins next year," Mr Green warned.
According to analysis from the Office for Budget Responsibility (OBR), the triple lock is costing the UK Government around £10billion more than initially forecast.
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How much will the state pension triple lock cost the British taxpayer? | OBR Despite this trend, Labour ministers have pledged to keep the payment mechanism in place with Pensions Minister Torsten Bell confirming that the triple lock is "staying".
Kevin Mountford, the co-founder of Raisin UK, urged those preparing for retirement to not rely solely on the state pension.
He shared: "The triple lock remains an important safeguard, but it is essential for people to plan ahead, be aware of how tax thresholds affect them, and look at ways to make their money work harder, whether that is securing competitive savings rates, making use of ISAs where suitable, or keeping a close eye on everyday expenses."