A campaign calling on the Government to provide pensioners with a special exemption from the tax burden affecting the lowest earners has surged past a crucial milestone as backing continues to grow. 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 the mechanism known as ‘fiscal drag’, significantly more people are now liable for tax – including some of the nation’s lowest earners.
Concerns are mounting that even those receiving the basic state pension may soon begin paying income tax under the ‘triple lock’ arrangement. The State Pension is expected to increase by 4.8% in April 2026 owing to the government’s triple lock guarantee.
This will raise the full new State Pension from £230.25 to £241.30 per week (£12,548 per year), which sits just marginally beneath the threshold.
The government has already announced that the freeze will extend until 2028, meaning future years will see pensioners starting to pay income tax. Chancellor Rachel Reeves will reportedly freeze thresholds for a further two years to 2030 after abandoning her plans to raise income tax in the budget, according to fresh reports, which suggested the measure could deliver £8 billion to the Treasury.
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 today surged past 10,000 signatures to 11,959, compelling the Treasury to respond and outline whether it will consider such a change. This could heap pressure on ministers ahead of the Budget, and if it reaches 100,000 signatures, it may also prompt a debate amongst MPs.
The petition, launched 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 lifted 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 sparked considerable public attention, with numerous petitions launched across the country. An earlier petition this year calling for the threshold to be increased to £20,000 attracted a remarkable 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 depth of public concern, a new petition has now been launched demanding the income tax personal allowance be increased from £12,570 to £20,000.
Campaigners highlighted the previous petition’s position as among the largest ever recorded on the parliament website as evidence of widespread public sentiment on the issue. At present, a basic tax rate of 20 per cent applies to earnings above £12,570, while 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 adjustments 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.”
The IFS chief suggested that if the Government opts to increase a range of smaller taxes, they should also be reformed “so that they do less damage to growth”.
The petition is available for viewing here.
