“This means that if you receive the full new state pension, you will have £2,942.20 (£12,570 less £9,627.80) of your personal allowance remaining for other taxable income streams such as employment or a private or occupational pension.”

With inflation continuing to rise, the state pension may eventually exceed the Personal Allowance.

It would mean the 20 percent rate would be due on earnings above this particular threshold.

Andrew Tully, technical director of Canada Life, warned: “The frozen personal allowance, and income tax thresholds, are a stealth tax.

“This will potentially drag millions more pensioners into paying income tax for the first time or paying higher rate tax when they were previously basic rate taxpayers.”