The Autumn Budget 2026, delivered on 28 October 2026, sets out the new Pension Tax Allowance, first announced at Budget 2025, so that pensioners living on little more than the State Pension stop owing small amounts of income tax. It also keeps the Triple Lock until April 2029 and changes how the State Pension is uprated after that. The Personal Allowance stays frozen, and tax on savings interest rises from April 2027. For every other measure, see our Autumn Budget 2026 summary.
What changed at a glance
| Measure | What happens | From |
|---|---|---|
| Pension Tax Allowance | New income tax reduction for pensioners whose total income is up to the full new State Pension | 6 April 2027 to 5 April 2030 |
| Triple Lock | Kept: highest of earnings, inflation or 2.5% | through April 2029 |
| State Pension uprating | Adjusted Triple Lock | April 2030 |
| Tax on savings interest | 24% / 44% / 49% above your Personal Savings Allowance | 6 April 2027 |
| Unused pensions and Inheritance Tax | Confirmed: brought into the estate | April 2027 |
| Personal Allowance | Unchanged at £12,570 | 2027-28 |
The Pension Tax Allowance
The full new State Pension is close to the £12,570 Personal Allowance, which is frozen. Without a change, many pensioners with only a State Pension would owe a few pounds of income tax, collected through Simple Assessment. The Pension Tax Allowance removes that.
- Who gets it: people above State Pension age, or reaching it during the tax year, whose total income is up to the value of the full new State Pension.
- When: 6 April 2027 to 5 April 2030 (the 2027-28, 2028-29 and 2029-30 tax years).
- How much in 2027-28: HMRC’s rates table gives the full allowance where total income is below £13,037, a reduced allowance between £13,037 and £13,319, and nothing from £13,319.
- What it is: a tax reduction applied to your income tax, not a change to your Personal Allowance.
The figures for 2028-29 and 2029-30 will follow the full new State Pension, and what happens after April 2030 has not been decided. The State Pension rates page has the current weekly rates.
The State Pension and the Triple Lock
DWP’s statutory review of benefit rates (written statement HCWS427, 28 October 2026) confirms the full basic and new State Pension rise by 3.9% in April 2027, in line with earnings growth, the largest of the three Triple Lock measures. Other State Pension and benefit rates in the review, such as Additional State Pension, rise by 3.5%, in line with inflation. DWP has not yet published the 2027-28 weekly rates; the State Pension rates page shows them as its own estimate until it does. The Budget confirms that the State Pension keeps rising each April by the highest of earnings growth, inflation or 2.5% through April 2029. From April 2030 the Triple Lock is adjusted: the State Pension will rise by the highest of 2.5%, inflation, or the amount needed to keep its value relative to earnings as it stood in April 2029.
Savings, ISAs and income tax
The Personal Allowance stays £12,570 in 2027-28 and income tax rates are unchanged. Tax on savings interest rises from 6 April 2027 to 24%, 44% and 49% on interest above your Personal Savings Allowance, which stays £1,000 for basic rate and £500 for higher rate taxpayers. Interest in an ISA stays tax-free, and the cash ISA limit stays £20,000. See tax on savings interest and our guide for investors and savers.
Pensions and Inheritance Tax
The plan to bring most unused pension funds and death benefits into the estate for Inheritance Tax from April 2027 goes ahead. The nil-rate band stays £325,000 and the residence nil-rate band £175,000 for 2027-28. The pension annual allowance stays £60,000 and the money purchase annual allowance £10,000. The pension IHT 2027 planner estimates what the change means for an estate.
Winter Fuel Payment
Budget 2026 announced no change to the Winter Fuel Payment. The Winter Fuel Payment calculator shows how it works this winter.
What to do now
- If your income is close to the State Pension, note that from 6 April 2027 the Pension Tax Allowance should remove a small income tax bill without you having to claim.
- If you have savings outside an ISA, check whether your interest goes over your Personal Savings Allowance with tax on savings interest.
- If you are leaving a pension to family, run the pension IHT 2027 planner.
Summary
Budget 2026 confirms the Pension Tax Allowance announced at Budget 2025. It runs from 6 April 2027 to 5 April 2030, so those whose total income is up to the full new State Pension pay no income tax on it. The Triple Lock stays until April 2029 and is adjusted from April 2030. Tax on savings interest rises from April 2027, and unused pensions come into Inheritance Tax as planned. DWP has confirmed a 3.9% State Pension rise for April 2027, with the weekly rates still to come.