Pension payments for the 2026/27 tax year
For the 2026/27 tax year there will be 14 pensioner paydays, so this will have some impacts when it comes to tax. This situation arises roughly every 23-25 years and is therefore a very rare occurrence.
We have set out below our understanding of how this will work.
HMRC underpayment of tax
For the 2026-27 tax year you will be paid on 14 paydays you might receive a letter from HM Revenue & Customs (HMRC) about an underpayment of income tax following the end of the tax year.
While you don’t need to do anything now, we want you to be aware of the impact if you’re affected and that HMRC contacts you.
Week 56 payroll
The fourteenth payday (known as week 56 payroll) means your annual personal tax allowance is ‘used up’ by week 52 (pay day 13). Because HMRC instruct us to apply the allowance for the full 56 weeks (14 pay days), the overall tax-free pay you received was greater than your personal allowance.
At the end of the tax year, HMRC recalculates the overall amount of tax due and, where tax has been underpaid, issues a P800 form, which details how it calculated the underpayment. To recover the underpayment of tax, HMRC will normally reduce a pensioner’s tax code in the following tax year (2027/2028).
A week 56 payroll (or 14 pay days) only happens every 23 - 25 years. As this is not a common occurrence, there are still some unknowns as to how HMRC will respond. However, we’re trying to gain more clarity from HMRC and we’ll keep you updated with any further details we receive.
What do I need to do?
The expectation is you won’t need to do anything. HMRC will adjust your tax code so we can ensure any underpayment is paid in 2027/2028. HMRC will send you a letter to explain this.
You can find out more in the frequently asked questions section below. If you can’t find an answer to your question or query, please contact HMRC directly on 0300 200 3300, Monday to Friday, 08:00 to 18:00 (closed on weekends and bank holidays). They will need to quote their National Insurance Number.
As you will be paid on 5 April 2027, resulting in 14 payments for the 2026/27 tax year rather than the standard 13. For four-weekly paid employees, this is called ‘a week 56 pay day’. This situation arises roughly every 23-24 years and is therefore a very rare occurrence.
This is when you receive 14 four weekly payments in a single tax year from 6 April 2026 to 5 April 2027.
Most pensioners are entitled to a certain amount of tax-free income known as the personal allowance, in 2026/27 the personal allowance is £12,570.
When calculating PAYE tax, HM Revenue & Customs (HMRC) divide the personal allowance by the usual number of pay periods in the year to calculate the tax-free pay for that period, for example a 4 weekly paid pensioner is allocated 1/13 of their annual personal allowance in each 4 weekly pay period.
A week 56 payroll causes an issue because the annual personal allowance has already been ‘used up’ by week 52, so pensioners are not actually entitled to any more tax-free pay in that year. To prevent a pensioner’s earnings resulting in less take home pay than usual, HMRC instruct us to apply the allowance therefore the employee’s overall tax-free pay for that year is greater than the annual personal allowance.
After the end of the tax year, HMRC review all pensioner tax records and recalculate the overall amount of tax due. With a week 56, most pensioners will have underpaid income tax as they’ve been given an extra amount of tax-free pay in that period. This follows the HMRC process for a week 56 payment.
As pensioners will have underpaid income tax, HMRC will issue a P800 (calculation of underpayment of tax) which details how HMRC have calculated the underpayment. It also gives details of how HMRC will recover the underpayment.
Normally HMRC will reduce an employee’s tax code in the following tax year (2027/2028) and/or subsequent year (2028/2029) to recover the underpayment of tax.
If a pensioner is in financial hardship, it may be possible to have the adjustment made over two tax years or the employee can make a payment in full to clear the underpayment. The pensioner would need to contact the Pension Fund Helpline for this. (what will they be able to do?)
Only HMRC can advise of the amount of underpaid Income Tax.
You don’t need to directly pay HMRC, this will be done through your payroll. At the end of the tax year, HMRC recalculates the overall amount of tax due and issues a P800, which details how it calculated the underpayment.
To recover the underpayment of tax, HMRC will normally reduce an pensioner’s tax code in the following tax year (2027/2028) and/or subsequent year (2028/2029).
You’ll need to contact the HMRC Helpline on 0300 200 3300. Their opening times are Monday to Friday: 08:00 to 18:00, closed on weekends and bank holidays. You’ll need to quote your National Insurance Number.
It will depend on personal circumstances. Income Tax is a complex issue and various individual circumstances can influence the amount people pay, for example, someone having another form of income, works part-time and their level of earnings will be taken into account.