Our financial expert explains what the expected state pension rise could mean for your tax bill, plus important news on Pension Credit, new-build complaints, and savings.
From April the new state pension is expected to rise to just over £13,000 a year, just above the personal tax-free allowance of £12,570 a year. So tax will be due just on that pension.
But the news is not as dramatic as it seems. Around three million pensioners got a state pension above the tax allowance in 2025/26. About two-and-a-half million were on the old state pension not the new one because it comes with extra amounts.
New state pensioners have fewer extras so only about 725,000 got a pension above the tax-free allowance last year. But from April that number will rocket and an announcement about how that tax will be dealt with is expected in the Budget on 28 October.
Complaints to the New Homes Ombudsman Service (NHOS) trebled to more than 1,800 in 2025/26. The NHOS takes complaints from those who have bought a new house or flat but can’t get problems like snagging or bad workmanship sorted by the developer.
More than four out of five complaints to the NHOS are successful and compensation can be paid. It can only deal with complaints about the 300 or so firms that have registered with it.
If you’re among the 1.5 million people who get pension credit, the Department for Work and Pensions may contact you to check you are not getting too much. If it finds you are receiving too little it will pay you more, but overall it is expecting to save around £370 million by reducing or taking away money paid to 100,000 pensioners whose circumstances have changed.
If it happens to you, get advice from a charity such as Independent Age (0800 319 6789) or Citizens Advice. More at the Government's website – search “pension credit” and click on “change of circumstances” or call the Pension Service helpline (0800 731 0469).
New Bank of England figures show that in June more than £1.2 trillion (£1,200,000,000,000!) in savings was sitting in accounts paying nothing or next to nothing in interest. About a quarter is earning nothing at all and the rest averages 1.6% – a third of the 4.5% or 5% that you get in best buy accounts.
Every big UK bank has at least one account paying 1% or less even though they are paid 3.75% on money they deposit at the Bank of England. So move your savings to a better account and make it work hard for you, not the banks!
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With the start of the new financial year on 6 April, our money expert explains the changes to your pension, benefits and taxes.
