Big changes are coming to the UK State Pension system in 2026, and while payments will technically rise, many pensioners could end up worse off. A combination of tax freezes, eligibility changes, and rising pension age could reduce your real income if you’re not prepared. Whether you’re nearing retirement or helping someone who is, here’s everything you need to know to stay ahead.
Overview
While the State Pension will continue to rise under the triple lock, changes to eligibility, tax thresholds, and age limits mean many pensioners will need to adjust their financial plans.
| Change | Details | Impact |
|---|---|---|
| State Pension Age Increase | From 66 to 67 between May 2026 and March 2028 | Delays pension for those born April 1960–April 1977 |
| Frozen Personal Tax Allowance | £12,570 limit frozen until April 2028 | More pensioners become liable for income tax |
| Winter Fuel Payment Means-Tested | Only for Pension Credit recipients | Up to 100,000 pensioners may lose this seasonal support |
| Triple Lock Continues | 4.1% increase in 2025–26 | State Pension rises to £11,973/year |
| More Pensioners Paying Tax | Expected to hit 5.5 million by 2029 | Compared to 1.4 million in 2023 |
Age
The most significant change is the State Pension age increase from 66 to 67. This will be phased in between May 6, 2026, and March 6, 2028, and affects anyone born between April 6, 1960 and April 5, 1977.
If you were planning to retire at 66, you’ll need to adjust your plans. This delay could mean working longer or having savings in place to cover the gap.
Tax
The personal allowance—what you can earn tax-free—is frozen at £12,570 until 2028. With the new State Pension rising to £11,973 in April 2025, many retirees will find themselves just below the tax line.
But if you receive private pensions, part-time income, or even interest on savings, you could exceed the threshold and face tax on income that previously went untaxed. It’s a quiet tax rise and it’s catching many off guard.
Back in 2010, only 11% of pensioners paid income tax. That number is projected to hit 43% by 2029–30.
Winter
Another major change is the move to means-testing the Winter Fuel Payment. Previously available to most pensioners, it will now be restricted to those receiving Pension Credit and similar benefits.
The risk? Many on modest incomes who don’t qualify for Pension Credit could lose up to £300 in vital winter heating support.
And with energy bills still high despite the Energy Price Guarantee, this could push more pensioners into hardship.
Triple
On the positive side, the triple lock remains in place. In 2025–26, it will deliver a 4.1% increase in State Pension payments.
That brings the full new State Pension up to:
- £230.25 per week
- £11,973 per year
This system ensures pensions rise with inflation, wage growth, or by 2.5% — whichever is highest.
It’s a key safeguard against inflation, and for now, it stays intact.
Action
Now is the time to get proactive. Here’s what you can do to soften the blow of these changes:
1. Check Your Pension Forecast
Use the Check Your State Pension tool at GOV.UK to find out:
- When you’ll get your pension
- How much you’re due
- If you have any missing National Insurance years
2. Prepare for Income Tax
If you’re near the £12,570 tax threshold, consider:
- Using ISAs for tax-free income
- Delaying private pension withdrawals
- Splitting income with a spouse to reduce tax burden
3. Claim Pension Credit
Over 850,000 pensioners are missing out on Pension Credit. Even a small entitlement can unlock:
- Council Tax reductions
- Free NHS dental treatment
- Cold Weather and Winter Fuel Payments
4. Budget for Energy Costs
If you’ll lose the Winter Fuel Payment, consider:
- Applying for the Warm Home Discount
- Switching energy suppliers or tariffs
- Contacting your council for energy support grants
More
A few additional strategies can help you better prepare for the coming changes:
Track Inflation
Inflation drives triple lock increases. Stay up to date with CPI figures from the Office for National Statistics.
Delay Retirement
Deferring your State Pension increases your weekly amount by 5.8% per year. If you have other income sources, this could be a smart move.
Build a Bridge Fund
If your State Pension age increases, having a savings pot to cover the gap can help avoid financial stress.
FAQs
When does the State Pension age rise?
Between May 2026 and March 2028, it will go from 66 to 67.
Will my pension still rise each year?
Yes, the triple lock will raise it by 4.1% in 2025–26.
Do I have to pay tax on my State Pension?
Yes, if your income exceeds the £12,570 allowance.
Is the Winter Fuel Payment changing?
Yes, it will be means-tested and linked to Pension Credit.
Can I delay claiming my pension?
Yes, and your weekly payments will increase by 5.8% per year.
