What is the Alan Perkins state pension tax issue?

The Alan Perkins state pension tax issue highlights how frozen tax thresholds and SERPS top-ups can push retirees into paying income tax, even when they rely only on the state pension. A 71-year-old faced an £800 bill due to coding delays and incremental increases. The case shows this is structural, not rare. It raises fairness concerns and calls for guidance on whether HMRC will simplify codes and how any 2027 exemption would apply to people with SERPS.

Will the 2027 Rachel Reeves exemption remove SERPS tax?

Based on current signals, the 2027 Rachel Reeves exemption is aimed at the core state pension only. SERPS and other increments are likely to remain taxable, creating a two-tier result. The Alan Perkins state pension tax debate focuses on this point. Until legislation and HMRC guidance confirm scope and mechanics, retirees with SERPS should plan for ongoing tax and keep evidence of payments in case codes need correction or backdated bills arise.

How can retirees reduce the risk of an £800 surprise bill?

Act early. Ask HMRC to review your PAYE code when your award letter shows a change to state pension or SERPS. Keep records and compare estimated tax with actual deductions monthly. If you expect a liability, consider setting aside funds in a separate account. The Alan Perkins state pension tax row shows small increments can matter. Seek advice on using ISA allowances and timing withdrawals from private pensions so taxable income stays predictable through the year.

What should investors do as policy risk rises?

Model three paths: no change, a core-only 2027 exemption, and wider relief. Stress test net income with conservative SERPS tax assumptions and the state pension threshold freeze. The Alan Perkins state pension tax story suggests behaviour could shift in annuities, drawdown, and cash holdings. Keep liquidity for HMRC adjustments, plan ISA funding early in the tax year, and document communications with providers so you can resolve coding issues quickly if thresholds or rules change.

Law and Government

December 22: UK State Pension Tax Row — SERPS Top‑Ups Trigger £800 Bills as 2027 Exemption Plan FuEL

ByHuzaifa Zahoor December 23, 2025December 23, 2025

Alan Perkins state pension tax is now central to a wider UK debate: frozen allowances and SERPS top-ups are tipping some pensioners into income tax, even with no private savings. A 71-year-old faced an £800 bill, despite talk of a 2027 exemption for the basic/new state pension only. We explain how SERPS tax arises, why a two-tier outcome is likely, and what investors should monitor in annuity demand, retirement timing, and policy risk around means-testing. Clarity from the Treasury is needed now.