The Personal Allowance in Retirement
The personal allowance is not age-related for anyone born after 6 April 1948. Every UK taxpayer — including pensioners — receives the standard personal allowance of £12,570 for 2025/26. There is no higher 'pensioner allowance' for those born after this date; age-related allowances were phased out in 2016.
What does matter in retirement is how multiple income streams combine. The State Pension, workplace pensions, private pension withdrawals, investment income and any continuing self-employment profits all count towards your total income — and the allowance covers all of them together.
State Pension and Tax
The full New State Pension for 2025/26 is approximately £11,502 per year. This is below the personal allowance of £12,570, so State Pension alone does not generate a tax liability. However, the gap is narrowing — if State Pension rises further (under the triple lock) while the personal allowance remains frozen, State Pension income alone could eventually exceed the allowance.
If you have additional pension income, investment income or self-employment profits, these stack on top of the State Pension. The combined total is compared to the personal allowance — and only the amount above £12,570 is taxed.
The Marriage Allowance for Pensioner Couples
If your income is below the personal allowance (£12,570) and your spouse or civil partner is a basic-rate taxpayer, you can transfer £1,260 of your unused allowance to them using the Marriage Allowance. This saves up to £252 per year in tax and is worth claiming if one partner's income is significantly lower than the other's.