The Chancellor of the Exchequer, Rachel Reeves, delivered the Autumn Budget on 26 November. Here’s a breakdown of the key pension points:

State Pension

The State Pension is due to increase from April 2026.

• It is expected to rise by 4.8%.
• If you are entitled to the full new State Pension, you will receive around £575 more a year.

This increase is in keeping with the government’s Triple Lock promise. This guarantees that the State Pension rises by the highest of inflation, wage growth, or 2.5%, ensuring it keeps pace with prices and wages.

Tax thresholds frozen

Income tax 

The amount of income you can receive in a tax year before paying basic rate tax  will remain frozen at £12,570 until 5 April 2031. Similarly, the amount of income you can receive before paying higher rate tax will remain at £50,270.

Inheritance Tax

The Chancellor confirmed the level at which you start to pay Inheritance Tax (IHT) will be frozen at £325,000 until 5 April 2031. This follows previously announced changes around how the government will treat pension lump sum death benefits for IHT purposes. You can read more about these changes in the Inheritance Tax and your NPF pension article.  

A change to pension saving for people still working

The government announced a change to the tax savings available to pension contributions made through a salary sacrifice arrangement. This is a specific way some employees can choose to make pension contributions without having to pay National Insurance on their contributions. 

From April 2029, only the first £2,000 of any pension contributions made through salary sacrifice over a tax year will benefit from National Insurance savings.