Will the state pension exceed the personal allowance in 2027? Yes—and the numbers now make it clear. From April 2027 the full new State Pension is on track to clear the frozen £12,570 personal allowance for the first time, landing around £13,036 a year after the expected 3.9% triple-lock uplift.
Here’s the quick view:
- Full new State Pension currently sits just £22 under the allowance in 2026/27.
- Earnings growth of 3.9% (the highest triple-lock measure) pushes it over by roughly £466.
- The personal allowance stays locked at £12,570 until April 2031.
- Government has said pure State Pension-only recipients won’t face the admin headache of paying small tax bills via Simple Assessment—but the exact mechanics are still pending.
- Anyone with private pensions, savings interest or other taxable income will feel the tax effect sooner.
That collision between a rising State Pension and a frozen tax threshold is the story for 2027. Let’s unpack what it means in practice.
Why will the state pension exceed the personal allowance in 2027?
The triple lock still rules: the State Pension rises each April by the highest of average earnings growth (May–July), September CPI, or 2.5%. July 2026 earnings came in at 3.9%. September CPI hit 3.5%. So 3.9% is the figure.
Apply it to the 2026/27 full new State Pension of £241.30 a week (£12,547.60 a year) and you get about £250.70 a week—£13,036 annually. The personal allowance has been stuck at £12,570 since 2021 and the 2025 Budget extended that freeze to 2031. The gap is closed.
The basic (pre-2016) State Pension stays well below, rising to around £9,989. Only the full new rate crosses the line on its own.
Projected numbers at a glance
| Measure | 2026/27 | Expected 2027/28 | Difference vs personal allowance |
|---|---|---|---|
| Full new State Pension (weekly) | £241.30 | £250.70 | — |
| Full new State Pension (annual) | £12,547.60 | £13,036 | +£466 |
| Personal Allowance | £12,570 | £12,570 (frozen) | — |
| Basic State Pension (annual) | £9,615 | £9,989 | Still under |
Figures are projections based on the confirmed 3.9% earnings figure and current rates; final confirmation comes in the Budget.
What the government has already promised
In the 2025 Budget the Treasury said it would “ease the administrative burden” for pensioners whose only income is the basic or new State Pension with no increments. They won’t have to pay small amounts of tax through Simple Assessment from 2027/28.
That’s the safety net for pure State Pension households. Details on how HMRC will identify those people, or what counts as “increments,” remain thin. Expect more in the next Budget. Anyone with even modest other taxable income falls outside that carve-out.
Step-by-step action plan if you’re approaching or already drawing the State Pension
- Check your exact State Pension forecast on the official GOV.UK service. Know whether you’re on the full new rate, a reduced new rate, or the old basic system.
- List every other income source—private pensions, workplace schemes, savings interest, rental income, part-time work. Add them up for the 2027/28 tax year.
- Run a simple tax calculation: State Pension + other taxable income minus £12,570. Anything left is taxed at 20% (basic rate in England, Wales, Northern Ireland; Scotland has its own bands).
- Decide whether to use the Marriage Allowance if your spouse or civil partner is a non-taxpayer. Up to £1,260 of unused personal allowance can transfer.
- If you’re still working or have flexible private pensions, consider the timing of withdrawals so you don’t push yourself unnecessarily into the tax net in 2027/28.
- Set a calendar reminder for the Autumn Budget and the official uprating announcement—usually confirmed then and applied from 6 April.
In my experience, the people who stay calmest are those who treat this as a cash-flow exercise rather than a surprise bill. Map the numbers once, then park it until the Budget clarifies the admin rules.
Common mistakes and how to fix them
Thinking “I’m only on the State Pension so I’ll never pay tax.” The full new rate will sit above the allowance. The government carve-out helps pure cases, but you still need to confirm you qualify. Fix: check the exact wording once details appear and keep records of all income.
Ignoring small pots or deferred State Pension increments. Those extras can tip you over and take you outside the promised protection. Fix: request a full breakdown from the DWP.
Assuming the personal allowance will rise. It won’t—until at least 2031. Fix: plan on £12,570 for the next four tax years.
Forgetting Scotland’s different income tax rates. The personal allowance is UK-wide, but higher bands and rates apply north of the border. Fix: use the Scottish tax calculator if that’s you.
Waiting for HMRC to contact you. Simple Assessment letters can arrive months later. Fix: estimate your own liability early so there’s no cash-flow shock.
Will the state pension exceed the personal allowance in 2027 for everyone?
No. Only the full new State Pension crosses the threshold on its own. Reduced-rate new State Pensions and the basic State Pension stay under. The real question is your total taxable income.
Here’s the practical test I’d run if I were advising a client: add every taxable pound you expect in 2027/28. If the total is under £12,570 you’re fine. Between £12,570 and roughly £13,036 and you’re pure State Pension only, the promised relief should cover you. Above that, you’re in the normal tax system.
The freeze on the personal allowance is the quiet driver. Earnings and prices keep rising; the tax-free slice does not. That drag is deliberate policy and it will keep pulling more pensioners into tax even after 2027.
Key Takeaways
- Yes—the full new State Pension is projected to reach about £13,036 in 2027/28 and clear the £12,570 personal allowance by roughly £466.
- The 3.9% triple-lock rise (earnings-driven) is the figure currently locked in after September CPI came in lower.
- Personal allowance remains frozen until April 2031.
- Pure State Pension-only households (no increments) have been promised relief from Simple Assessment tax admin.
- Any other taxable income removes that protection.
- Basic State Pension stays safely below the threshold.
- Final rates and the exact relief mechanism will be confirmed in the Budget.
- Run your own total-income calculation now rather than waiting for a letter from HMRC.
The crossover was always coming once the freeze was extended and the triple lock kept delivering. The good news is the government saw it coming and offered a limited safety valve. The sharper move is to know your own numbers before April 2027 arrives. Check your forecast, add up the rest of your income, and decide whether any small adjustments now will keep next year’s tax bill simple. That’s the practical next step.
FAQs
Will the state pension exceed the personal allowance in 2027 if I only receive a reduced new State Pension?
No. Only the full rate is projected to clear £12,570 on its own. A reduced rate stays under unless you have other taxable income.
What happens if will the state pension exceed the personal allowance in 2027 and I also have a small private pension?
You’re outside the pure State Pension carve-out. The excess above £12,570 becomes taxable at the basic rate in the normal way. HMRC will usually collect via Simple Assessment or adjust a tax code if you have PAYE income.
Does the freeze mean will the state pension exceed the personal allowance in 2027 and then keep rising further above it?
Yes. With the allowance fixed until 2031 and the triple lock still operating at least until 2030, the gap is expected to widen each year unless policy changes.
