State pensioners face £8,000 drop in payments as 'many won't see it coming'

State pensioners could see their payments drop by £8,000 a year and many are unaware of the looming change, an expert has warned.

The triple lock ensures state pension rates go up each April in line with the highest of 2.5%, the rise in average earnings or inflation.

But if payment rates increase by 5% or more next year, the full new state pension will become subject to income tax, which could impact some pensioners' finances in ways they don't realise.

In line with the personal allowance, you can earn up to £12,570 a year without paying income tax, but the full new state pension is currently £230.25 a week, or £11,973, just £600 away from crossing the threshold.

Rebecca Lamb, external relations manager at , warned: "Many people understandably assume that a small rise in their pension is a good thing.

"But if it pushes them just over the personal tax allowance, it won't just mean paying a bit of income tax - it could disqualify them from Pension Credit, which in turn opens the door to a much larger loss.

"Pension Credit acts as a gateway to a wide range of help: Housing Benefit, Council Tax Reduction, free NHS dental and eye care, the Warm Home Discount, Cold Weather Payments, and even the free TV licence for over-75s.

"In total, someone could end up losing more than £8,000 a year in support, all because their pension creeps just above the threshold."

Ms Lamb also warned that many pensioners may without realising go over the threshold and lose out. She explained: "What's most worrying is that many won't see it coming.

"There's no clear warning when someone is about to lose entitlement, and pensioners who aren't online or don't have support with money matters may not realise until it's too late."

Pension Credit tops up a person's income, increasing your weekly income up to £227.10 for single claimants and up to £346.60 for couples.

The income top up could actually be more, as there are additional payments on top of this depending on your situation, such as if you care for an adult or have a severe disability.

The average claim provides access to £3,900 in extra help although you could get more depending on your circumstances.

Hundreds of thousands of people are thought to be missing out on the benefit, despite a recent Government push to get people to apply.

You can check if you are eligible using a benefits calculator tool, such as the one on the .

If state pension payments increase by 5% next year, some 1.6 million more pensioners could start paying income tax, bringing the total of pensioners who pay the tax to 9 million.