HMRC state pension tax alert over amounts showing on bank statements

Key changes to the state pension are taking effect over the coming years

HMRC has issued a statement on how tax on the state pension works. The update follows an enquiry regarding the deductions that apply to payments.

A person contacted the tax authority via social media with a query. They asked the organisation: “Where can I find a monthly statement of my state pension showing the payment and deductions?” Now is an opportune time to review your state pension payments.

The state pension is rising by 4.8 per cent from April, increasing the full new state pension from £230.25 a week to £241.30 a week. In response to the enquiry, HMRC outlined the essential rules to understand.

The organisation said: “State pension is paid by the Department for Work and Pensions (DWP) and no tax is deducted at source.

“Your pension payments do appear only on your bank statements – DWP pays the same amount every four weeks.” This means if you’re entitled to the full new state pension, you’ll receive £965.20 each payment period.

If you’re receiving the full basic state pension, this will amount to £184.90 a week, or £739.60 each four-week payment period. Payments typically arrive in arrears.

The particular day you receive your state pension depends on the last two digits of your National Insurance (NI) number. This is how it operates:

• 00 to 19: Monday
• 20 to 39: Tuesday
• 40 to 59: Wednesday
• 60 to 79: Thursday
• 80 to 99: Friday

Those planning for their retirement should be aware of another significant change set to take effect from April 2026.

The state pension age will rise from 66, moving up gradually to reach 67 between April 2026 and April 2028.

Legislation has also been enacted for a further increase to 68, between 2044 and 2046.

You can find out how much state pension you’re projected to receive using the forecast tool on the Government website.