Answers · UK 2025/26

How much can a pensioner earn before paying tax in the UK?

Pensioners can earn up to the standard £12,570 Personal Allowance before paying any Income Tax in 2026/27 — there is no special age allowance. Since the full new State Pension is £241.30 a week (about £12,548 a year), it now uses almost the entire allowance, leaving only about £22 of tax-free headroom.

Last updated: 1 June 2026Last reviewed: 1 June 2026How we verify

Full answer

For 2026/27 there is no longer a separate age-related allowance; pensioners get the same £12,570 Personal Allowance as everyone else, and crucially the State Pension counts as taxable income. The full new State Pension is £241.30 a week, roughly £12,548 a year. That means a pensioner receiving the full new State Pension has only about £22 of unused Personal Allowance, so almost any private pension, employment or savings income on top becomes taxable at 20%. Worked example: a pensioner with the £12,548 State Pension plus a £5,000 workplace pension has total income of £17,548. After the £12,570 allowance, £4,978 is taxable at 20% = £996 Income Tax. Pensioners do not pay National Insurance on earnings once they reach State Pension age, even if they keep working. The £1,000 Personal Savings Allowance and £500 dividend allowance still apply on top. Because the State Pension is paid gross, any tax due on it is usually collected by adjusting the tax code on a private pension or through Self Assessment. The figures apply UK-wide, including Scotland, though Scottish rates apply above the allowance. Use the Income Tax calculator to estimate a pensioner's bill.