State pensioners may unknowingly be dragged into paying a new tax. An MP has warned that vulnerable claimants may have “no idea” they will soon need to fill in a HMRC form to settle a tax bill.

The update comes after Dr Luke Evans, MP for Bosworth, recently asked Chancellor Rachel Reeves about the issue of more state pensioners moving into paying income tax. After the Chancellor had presented her Spring Statement, Dr Evans asked the Chancellor: “I want to raise the issue of the freezing of thresholds and the effect on the state pension.

“When the Chancellor did it in her Budget, she told Martin Lewis that some people would be pulled into paying tax and won’t have to pay small amounts of tax and won’t have to do a tax return. The updated [OBR] forecast now says this year 600,000 pensioners will be drawn into paying tax, and going up to a one million by the end of this Parliament.

“Could she set out what the definition is of small amounts of tax and what the mechanism is she will use to make sure they don’t have to do a tax return?” This relates to a new policy announced in the Autumn Budget 2025.

The Government said it would bring in changes to ensure people “whose sole income is the basic or new state pension without any increments…do not have to pay small amounts of tax via simple assessment from 2027-28 if the new or basic state pension exceeds the personal allowance from that point”.

From April 2027, the full new state pension will use up all the £12,570 personal allowance and cross the line into attracting a tax bill. You can earn up to £12,570 a year without paying income tax thanks to the allowance, but the full new state pension now pays £230.25 a week, or £11,973 a year.

As state pension payments rise 4.8 percent this April thanks to the triple lock, more people with another means of income such as a private pension, will cross the line into paying income tax. Those on the full new state pension alone will also start paying income tax from April 2027, under the current rules.

Ms Reeves said in response to Dr Evans’ question: “As I said after the Budget last year, if you just get the basic state pension you will not be paying tax. We will be setting out more details of that in the coming months.”

Huge shock

Now Dr Evans has issued a fresh call for the Government to confirm how these tax changes will work. The Conservative MP said: “Many pensioners simply do not realise they could soon be paying tax on their state pension. For some, being dragged into filling out tax returns will come as a huge and unwelcome shock.

“The Chancellor needs to urgently explain how she plans to prevent this.” He said he has seen the impact of this issue on people in his Leicestershire constituency.

The representative said: “I’ve spoken to pensioners in my constituency who understand the impact of freezing the threshold, but I fear many others, including some of the most vulnerable, have no idea this is coming. Worst still, with all the policy kite flying before the Budget, many took out their pension as a lump sum to avoid a tax which never materialised.

“Rachel Reeves herself has said she does not want pensioners who rely solely on the state pension paying ‘tiny amounts of tax’ and that the Government is ‘working on a solution’. Yet that was in November – it is now March, and the Government’s own analysis shows 600,000 pensioners are on the hook. It’s time the Treasury set out exactly what that solution is, urgently.”

HMRC update

Top officials from HMRC were asked by the Treasury Committee in January 2026 about how the tax changes will be brought in. Cerys McDonald, director of Individuals Policy at HMRC, said there are somewhere between 800,000 and a million pensioners whose only income is the state pension.

She confirmed that new legislation would have to be added to the books to implement the change. Ms McDonald said: “We would expect this to go through the next finance bill in the Autumn but we have mobilised a project team already in anticipation of having to make this change. The mitigation that we would normally use to recover this tax is simple assessment, normally we wouldn’t be processing that for 2027/2028 until after the 2028 tax year, so we’ve got a decent run in here.”