State pensioners to be hit with new tax bill and it could threaten the triple lock

State pensioners could get a tax bill for the first time from next April and it could have a knock-on effect for the triple lock.

Just a 5% increase to payments next April would mean the full new state pension alone would use up all your tax-free personal allowance of £12,570, meaning the DWP payments would attract an income tax bill.

The full new state pension currently pays £230.25 a week, or £11,973 a year, just £600 away from being taxed.

Matthew Parden, financial planner at , warned this could cause issues beyond more state pensioners being taxed on their income.

He explained: "The potential for the full new state pension to generate a tax bill from next year as it uses up the personal allowance, could affect the future of the triple lock.

"As state pensions rise under it, more pensioners are being pushed into the tax net, especially those receiving the full new state pension.

"This could create political pressure as the pension is meant to provide financial security, but higher tax bills could undermine this goal for some recipients, as well as create additional administration for HMRC who would need to collect the tax."

The wealth expert said that as a result, the Government may need to revisit the triple lock policy, although Labour has committed to retaining the metric for the duration of this Parliament.

The triple lock ensures state pension payments go up each year, rising in April in line with the highest of 2.5%, inflation or the rise in average earnings.

Mr Parden said: "The combination of higher pensions and frozen tax thresholds may make the current formula unsustainable, prompting calls for reforms to balance fairness, affordability, and pensioner needs."

Another expert warning that the triple lock may soon change is Dr Christopher Massey, principal lecturer in modern British history and politics at Teesside University.

He said there are two issues that might force the policy to change, namely the rising costs of the state pension for the Treasury and the issue of fiscal drag as state pensioners' tax bills keep going up.

He explained: "The overall cost of state pensions might cause the government to change the triple lock itself. In an economy which is barely growing and with a tax bill which is at the highest level since the 1940s, the costs of the triple lock could soon become unsustainable."

Pointing to one alternative to the current system, Mr Massey said: "A potential solution to these problems would be to guarantee that the state pension would rise by at least inflation, rather than the highest of inflation, earnings growth, or 2.5%.

"A future target level for pensions should be provided as a percentage of median earnings. This would take away uncertainty for pensioners and for the public purse, but would also mean breaking the triple lock."

Mr Parden said the 2.5% element of the triple lock could be removed so only the rise in average earnings or inflation decides the yearly increase.

He explained: "This would still ensure the pension rises in line with economic conditions, but without the large increases that can occur during periods of high wage growth or inflation."

Another option he suggested is to have capped increases, with the yearly rise set at a "more moderate" level, with rates increases of 4% or 5%, regardless of earnings or inflation.

Mr Parden said that means-testing the payments is another alternative, so those in greater need get bigger payments, but this would raise concerns about fairness.

He warned: "Any change would need to carefully balance protecting pensioners with maintaining fiscal responsibility."