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Martin Lewis breaks down new pension tax rules with £13,037 threshold
The measure gives pensioners up to £13,037 in annual income tax-free and is meant to offset frozen allowances and rising State Pension payments.
- On yesterday's Martin Lewis Money Show Budget Special, Martin Lewis introduced the new Pension Tax Allowance to clarify tax rules for pensioners as the full new State Pension rises above the standard Personal Allowance.
- Without the new measure, the State Pension would exceed the frozen £12,570 Personal Allowance, threatening to drag many pensioners into paying Income Tax on their income.
- Pensioners can receive up to £13,037 in total annual income tax-free under the new arrangements, protecting them from tax bills that would otherwise arise from the rising State Pension.
- Martin explained a tapering system where the allowance reduces by £1 for every £3 earned above £13,037, meaning someone earning £99 more sees their extra tax-free benefit reduced by £33.
- Once total income reaches £13,319, the additional allowance disappears completely, returning pensioners to standard Income Tax rules, according to Martin.
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Telegraph & Argus+11 Reposted by 11 other sources
Martin Lewis breaks down new pension tax rules with £13,037 threshold
Martin Lewis explains the new £13,037 pension tax allowance, and why it matters for your State Pension in 2027.
·Bradford, United Kingdom
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