The state pension went up 8.5% in April – hitting £11,502 per year for someone on a full new state pension. This is great news for people’s beleaguered budgets, after the cost of living crisis laid waste to their finances. With inflation finally on the wane, this increase introduces some much-needed breathing space. However, many pensioners won’t be getting as much of this blockbusting increase as they first thought, because frozen tax thresholds threaten to claw back a bigger chunk of their income. The personal allowance and higher rate thresholds have been frozen for some time and this looks set to continue until 2028. This, along with a reduction in the additional rate threshold, means pensioners will be paying more tax. Read more: How to supercharge your pension this year With the full new state pension currently only a whisper under the personal allowance of £12,570, it doesn’t take much extra income from a private pension or self-invested personal pension (SIPP) to tip people into tax-paying territory. If the threshold remains as it is until 2028 then we don’t need to see particularly big annual increases before someone only in receipt of a full new state pension gets landed with...