Budget 2026: government to set out how pensioners on only the state pension will avoid income tax

The Autumn Budget, scheduled for 28 October 2026, made it onto Monday's front pages. According to the description of BBC's press review dated 26 October 2026, one headline referred to a "Budget tax reprieve for pensioners".

What is known about the plans

A House of Commons Library briefing of 22 October 2026 recalls that the government has pledged not to raise taxes on working people. That means no increase in National Insurance, the basic, higher or additional rates of income tax, or VAT.

The Library also notes that in the Budget the government is to set out how it will prevent pensioners whose only income is the basic or new state pension from paying income tax from the 2027/28 tax year.

Where the issue comes from

The state pension is subject to income tax. In practice, people who live only on it usually pay none, because their annual income falls below the personal allowance, the amount of income that is tax-free.

In the 2025 Budget the government froze the personal allowance at its current level until April 2031. It also announced that pensioners with only the basic or new state pension would not have to pay small amounts of tax through simple assessment from 2027/28. This applies if the pension exceeds the personal allowance. According to a briefing of 22 September 2026, the government had not yet published details of how it will do this.

What next

The House of Commons Library said it would publish a summary of the Budget on the evening of 28 October 2026. Only then will it be clear which solutions have been adopted and exactly who they will cover.

BBC's press review also mentions an investigation into the father of the Duchess of Sussex. Details of that story could not be confirmed in other sources, so we do not cover it here.

What this means for you

The announcement concerns people who receive the UK basic or new state pension and have no other income. For people living in the UK who have enough qualifying years and fall into this group, it may mean no need to settle small amounts of tax from 2027/28. The scope of the changes will only be known once the Budget is announced. The announcement does not affect other working people: the government says it will not raise the main taxes.