A petition on the Parliament website is calling for a new tax code for pensioners that would double their personal tax allowance – and it has passed a key threshold
A campaign calling on the Government to provide pensioners with a special exemption from tax burdens affecting the lowest earners has surged past a crucial milestone as momentum builds. A petition on the Parliament website is pushing for a new tax code for pensioners that would double their personal tax allowance.
Currently, anyone earning above £12,570 starts paying tax at the basic rate of 20 per cent. This threshold has remained frozen since 2021 and through a process called ‘fiscal drag’, increasing numbers of people are now paying tax – including some of the nation’s lowest earners.
Concerns are mounting that even those on the basic state pension could soon begin paying income tax under the ‘triple lock’ system. The State Pension is expected to increase by 4.8% in April 2026 thanks to the government’s triple lock guarantee.
This will push the full new State Pension from £230.25 to £241.30 weekly (£12,548 annually), which sits just beneath the threshold.
The government has already confirmed the freeze will extend until 2028, meaning subsequent years will see pensioners start paying income tax. Chancellor Rachel Reeves will reportedly extend the threshold freeze for an additional two years to 2030 after scrapping her plans to raise income tax in the budget, according to fresh reports, which suggested the decision could bring in £8 billion for the Treasury, reports Wales Online.
A Treasury spokesperson said: “We do not comment on speculation around changes to tax outside of fiscal events.” A petition on the Parliament website has now surged beyond 10,000 signatures to 11,959, meaning the Treasury must respond and outline whether it will consider making changes. This could pile pressure on ahead of the Budget, and if it reaches 100,000 signatures, it may also prompt a debate amongst MPs.
The petition, started by Timothy Hugh Mason, states: “We want the government to introduce a new tax code for state pensioners, set at double the basic threshold. If this was implemented, pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax.
“We think that people with small private or workplace pensions are currently being taxed unfairly.” Pressure is mounting on the government regarding tax allowances. Another petition has surpassed 10,000 signatures, calling for the basic threshold to be increased from £12,570 to £20,000.
A separate petition, started by Shannon Keene, states: “Raise the income tax personal allowance from £12,570 to £20,000. This would help with increasing rent, mortgages, Council tax, and Gas and Electric bills. Some families can’t afford to go back to work after children due to childcare costs wiping out their whole income!”. “We think that we are currently paying ridiculous amounts of tax, and that minimum wage isn’t even enough to support an average family. We believe that this would lead to a massive increase in people willing to look for work, instead of people not wanting to, due to it being too expensive to live now.”
The issue has attracted considerable public attention, with several petitions launched across the country. Earlier this year, a petition demanding the threshold be increased to £20,000 amassed an impressive 281,792 signatures on the Parliament website before it closed to new supporters during the summer.
This resulted in a Parliamentary debate where the Treasury estimated the cost at £50 billion. Reflecting the strength of public concern, a new petition has since been launched calling for the income tax personal allowance to be raised from £12,570 to £20,000.
Campaign organisers highlighted that the earlier petition ranked amongst the largest ever recorded on the Parliament website, demonstrating widespread public sentiment on this issue. At present, a basic tax rate of 20 per cent applies to earnings above £12,570, whilst higher earners face a 40 per cent rate on income over £50,270 – both thresholds have been frozen since 2021.
James Murray, Exchequer Secretary to the Treasury, has previously cautioned that increasing the tax threshold to £20,000 would impose a significant financial cost. He said: “I recognise the views of everyone who has put their name to the petition, and let me be clear that, as a Government, we want taxes on working people and on pensioners, who have worked hard all their lives, to be as low as possible.
“We were elected to put more money in people’s pockets and, crucially, we were elected to do so in a fiscally responsible way. That is a critical point to understand.
“We aim to keep taxes on working people and pensioners as low as possible, but if we were to heed the calls of some Opposition parties and abandon fiscal responsibility, it would lead to economic chaos and the collapse of public services, and that would harm working people and pensioners the most.
“Raising the personal allowance to £20,000 would cost more than £50 billion. That is more than the £45 billion of unfunded tax cuts announced by Liz Truss in her disastrous mini-Budget.”
Helen Miller, director of the Institute for Fiscal Studies (IFS) think tank, described it as “not unusual” for chancellors to make eleventh-hour amendments to their Budget proposals. She added: “But the news that Rachel Reeves has backed away from a plan to increase the rates of income tax will lead investors to worry that the Chancellor will instead increase a range of smaller taxes that can be more damaging to economic growth.
“They may also worry that the change of plans signals that this Government are reluctant to do politically difficult things. These are the kinds of concerns that can lead investors to demand higher returns when lending to the Government.”
Should the Government opt to increase a range of smaller taxes, they should also be reformed “so that they do less damage to growth”, stated the IFS chief. The petition is available for viewing here.
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