Do You Pay Tax on State Pension? (It depends…)

Is your State Pension taxable — and if it is, why doesn't HMRC take the tax before it hits your account?The full new State Pension is £12,548 a year. Your Personal Allowance is £12,570. That's a gap of just £22 — which means almost any extra income, even a tiny bit of savings interest, triggers a tax bill. And with the Personal Allowance frozen until at least 2031 while the triple lock keeps pushing the State Pension up, more pensioners are being dragged into tax every single year. There are now 9.3 million pensioners in the tax system, and most only find out when HMRC quietly adjusts their tax code.In this episode, I explain exactly how State Pension tax works, why it's paid gross with no tax deducted at source, how HMRC collects what you owe through your private pension or other income, and why even £10,000 sitting in a savings account could tip you over. I also cover two straightforward steps you can take this week — cash ISAs and Marriage Allowance — to cut your bill.With over 25 years advising individuals and major organisations on pensions and retirement income, I've seen how this catches people out year after year.Watch this episode in full on our YouTube channel: https://www.youtube.com/@retirementandmoney