Under the new rules, the tax-free allowance for people relying solely on the State Pension will rise to match the full annual payment.
The allowance will then increase alongside the State Pension for the remainder of the current Parliament.
However, the protection will not apply to pensioners receiving additional taxable income from workplace or private pensions.
Kate Smith, head of pensions at Aegon, welcomed the support for people on the lowest incomes but warned that it could be viewed as unfair by those who had saved for retirement.
She said: “Protecting those who rely solely on the State Pension from paying income tax will be welcome news for some of the lowest-income pensioners.
“However, there is a risk that creating a more generous tax position for those who have not built-up additional retirement savings could be seen as unfair by people who have had the means to do the right thing and saved through workplace and private pensions.”
Ms Smith said retirement policy should support saving while treating different generations and groups of pensioners fairly.