Recent data from the Department for Work and Pensions (DWP) suggests that 13 million people are currently at State Pension age in the UK. The official retirement age is 66, but it is slated to increase to 67 between 2027 to 2028.

The UK Government reports that around 8.51 million State Pension-aged citizens paid income tax in the last financial year. And, with the Personal Allowance staying at £12,570 until April 2028, more pensioners will face taxes on their retirement earnings.

Senior pensions and savings expert at AJ Bell Charlene Young cautions that upcoming fiscal adjustments could see more than one million pensioners enter the higher tax bracket, which stands at 40% for incomes spanning £50,271 to £125,140 in England or Wales and at 42% on earnings between £43,663 and £75,000 in Scotland.

According to the Daily Record, she said: "The nation has fallen victim to the effects of fiscal drag in recent years. Frozen allowances and tax thresholds have pulled more people into the tax system for the first time and hiked the rates of tax people pay as their income rises and they breach a new tax band.

"Pensioners are not shielded from it either - over one million people above state pension age will breach the higher rate 40 per cent threshold this tax year, more than double the number there were when the big freeze began."

Ms Young continued: "The UK Government is in a straitjacket thanks to its own fiscal rules, and these figures will bolster the arguments of those calling for state pension reform. The full ‘new’ State Pension is close to breaching the tax-free Personal Allowance, and many pensioners already receive well above this thanks to the way benefits could be built up under the old system.

"The Labour Party has repeatedly pledged to protect the Triple Lock guarantee and has paused further hikes to the State Pension age beyond those due to start in 2026. But with pensioner spending predicted to top 50 per cent of the welfare bill by the end of the decade, and the rise in State Pension age from 66 to 67 set to save £10 billion in borrowing, can it really continue to ignore calls for further reform?"

While the UK Government has committed to maintaining the Triple Lock policy throughout the current parliamentary term, this pledge could result in all people on the full New State Pension exceeding the tax threshold within a mere two years.

Under the Triple Lock mechanism, the New and Basic State Pensions swell each year in line with the highest of either the average earnings growth from May to July, the CPI measured up to September, or 2.5%. This measure serves to shield the real value of State Pensions against the erosive effects of living costs.

The New and Basic State Pensions saw a 4.1% increase in April, but future projections from the Labour Government anticipate a rise of 2.5% over the next four fiscal years. Based on these calculations, the full New State Pension is set to be worth £12,578.80 in the 2027/28 financial year - £78.80 above the Personal Allowance.

Although the amount of State Pension to be taxed may appear minimal, pensioners with additional income sources could find themselves having to fork out more money to cover a tax bill. This is particularly the case if it's not automatically deducted from private or workplace pensions through PAYE.

Online guidance is available on GOV.UK regarding who might need to pay tax on their pension. The site also includes a useful tool for calculating potential tax payments and the various methods for doing this.

The latest State Pension Triple Lock predictions show the following projected annual increases:

• 2025/26 - 4.1%, the forecast was 4%
• 2026/27 - 2.5%
• 2027/28 - 2.5%
• 2028/29 - 2.5%
• 2029/30 - 2.5%