• New analysis highlights that the single-tier state pension will account for 84% of the tax free personal allowance from April 6
  • Triple lock restoration will take the full single-tier state pension to £10,600.20 per year while the basic state pension will rise to £8122.40 per year
  • Those with modest pension savings urged to carefully manage withdrawals and examine benefit eligibility

The return of the triple lock will provide a welcome boost to pensioners’ incomes this April but new analysis from Standard Life, part of Phoenix Group highlights that increases will also take them closer to the tax free personal allowance limit.

From April 6 the single-tier state pension will pay £203.85 per week or £10,600.20 per year while those in receipt of the basic state pension will see their payment rise to £156.20, which may be topped up further by the Additional State Pension.

However, the freezing of the personal allowance since 2021/2022 means that the state pension payment has grown from 74% of the allowance to 84% today, meaning pensioners will need just £1,969.80 of income before they start paying income tax.

In 2019/20, the single tier state pension was equivalent to 70% of the personal allowance meaning people had £3,732.80 of headroom before they hit the limit.


Tax Year State pension (SP)* Basic state pension (single) (BSP)** Personal allowance (PA)*** SP as % of PA BSP as % of PA
2016/17 £8,093.80 £6,203.60 £11,000.00 74% 56%
2017/18 £8,296.60 £6,359.60 £11,500.00 75% 58%
2018/19 £8,546.20 £6,549.40 £11,850.00 72% 55%
2019/20 £8,767.20 £6,718.40 £12,500.00 70% 54%
2020/21 £9,110.40 £6,981.00 £12,500.00 73% 56%
2021/22 £9,339.20 £7,155.20 £12,570.00 74% 57%
2022/23 £9,627.80 £7,376.20 £12,570.00 77% 59%
2023/24 £10,600.20 £8,122.40 £12,570.00 84% 65%

Source – *Full state pension ; **Basic state pension rates ; ***Personal allowance figures

Dean Butler, Managing Director for Customer at Standard Life, said: “Pensioners are set to see a healthy boost to their incomes in a few days’ time as the state pension amount passes £10,000 for many for the first time.

“However, given the substantial state pension boost, it’s important to be aware of the implications this has in relation to the personal allowance which isn’t due to increase until April 2028. The personal allowance has remained flat in recent years and will gradually be bringing more and more people into the tax system as result.

“There are a few steps people with modest savings whose annual income is likely to be around the personal allowance limit can take. While 25% of pension savings can be withdrawn tax-free, the remainder can be taxed. For those incomes hovering around the personal allowance, it's worth ensuring they’re not taking bigger lump sums on which they might pay tax if they can be avoided. If they do have any ISA savings these are not subject to income tax so could be useful source of additional income.

“An income at or just above the level of the Personal Allowance is below the Pension and Lifetime Savings Association (PLSA)’s estimate for a minimum standard of living in retirement and people in this situation might be struggling financially, even before any tax liability. It’s worth anyone finding it difficult to get by each month checking what state benefits they might be entitled to – a good first port of call is to visit the benefits calculators page on the government website gov.uk.”



Media enquiries

James Ikin
07519 556776

James Merrick
Standard Life
07713 918949

About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
  • The value of investments can go down as well as up and may be worth less than originally invested.

Share via

Press releases