State pension ‘extra bill’ alert as claimants urged to check detail | Personal Finance | Finance

January 15, 2026 4,236

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State pensioners have been urged to check their tax details are correct (Image: Getty)

State pensioners have been urged to check their details are correct or they could get a surprise HMRC bill. The state pension is a taxable benefit, as with several other DWP benefits.

This means you could pay income tax on your payments and there is a risk you could pay the wrong amount of tax if your details are not all up-to-date with HMRC. The tax authority recently issued a reminder of a key principle that applies to state pensioners and indeed all taxpayers.

A spokesperson said: “Everyone is responsible for ensuring their own tax code is correct, and they can manage and update their tax code quickly and easily on our app or via their online tax account.” Your tax code determines what allowances you receive and how much income tax you pay on your income, so it’s crucial to make sure your code is correct.

Grace Hardy, finance content creator and CEO of Hardy Accounting, said benefit claimants who receive taxable benefits are at risk of paying the wrong amount of tax, including the state pension, ESA (Employment and Support Allowance) or Carer’s Allowance.

She warned: “If the claimant is in receipt of a taxable benefit – such as Carer’s Allowance or the state pension – and this isn’t accounted for in their tax code, it is possible they could be paying too little tax. They may end up with an extra bill at the end of the tax year as a result.”

Each person can earn up to £12,570 a year without paying income tax, in line with the personal allowance. The full new state pension is currently just £600 a year below this, paying £230.25 a week, or £11,973 a year.

If you are still working or receiving a private pension and your total income is above the personal allowance, HMRC may change your tax code to collect the tax on your state pension from your wages or from your pensions.

A guidance video from HMRC about how it collects tax due on your state pension explains: “If we can collect all the tax due this way, we’ll do it by changing your tax code. You don’t need to do anything.”

Nonetheless, it would be prudent for state pensioners to check what their tax code is and that they are being taxed correctly. You can find out your tax code through the Government website or through the HMRC app. If you want to check what your tax code means, there is a tool on the Government website to help you understand it.

Ms Hardy explained what to do if you think you are being taxed incorrectly: “Firstly, you should check who is responsible for the error: if the tax code is incorrect, it will likely be HMRC’s error; if the error surrounds benefit entitlement or payment amount, this will likely be the DWP’s responsibility.

“If the claimant has uncovered a tax issue, they can contact HMRC directly to resolve the issue; they can equally ask an accountant to amend the error on their behalf.”