HMRC to Update Tax Codes Following State Pension Increase

HMRC has issued an important update for state pensioners regarding upcoming tax code adjustments tied to changes in state pension payments. Starting April, state pensions will rise by 4.8 percent, aligned with the government’s triple lock policy. This policy guarantees that pension payments increase annually by the highest of three measures: 2.5 percent, the rise in average earnings, or the rate of inflation.

As state pensions increase, HMRC will automatically adjust pensioners’ tax codes to reflect the new payment amounts. According to official guidance, tax codes may change when your weekly state pension amount changes, ensuring the correct tax is deducted.

An HMRC spokesperson explained, “We adjust tax codes based on information from the Department for Work and Pensions (DWP) to help pensioners pay the right amount of tax.” Pensioners can check and update their tax details through the HMRC app or online tax account. For those who cannot access these services online, HMRC offers support via a helpline.

The pension increase applies from the start of the new tax year on April 6. Once the DWP notifies HMRC of the updated pension amount, HMRC recalculates tax codes for both the current and upcoming tax year. For most pensioners enrolled in the Pay As You Earn (PAYE) system, HMRC calculates the tax code by considering one week at the old pension rate and 51 weeks at the new rate, helping ensure accurate tax deductions throughout the year.

To verify or amend your tax code, use the HMRC app or your online tax account. If you suspect your tax code is incorrect and cannot resolve it online, you can contact HMRC by phone at 0300 200 3300. The helpline is open Monday to Friday from 8 am to 8 pm and Saturdays from 8 am to 4 pm.

For additional support regarding state pensions, the Government’s Pension Service can be reached at 0800 731 0469, available Monday to Friday, 8 am to 6 pm.