Chancellor Rachel Reeves is facing renewed pressure to increase the frozen income tax allowance for state pensioners, as a new campaign calls for the personal threshold to be raised from £12,570 to £14,000. The full new state pension is expected to exceed the current limit by 2027, dragging more pensioners into the tax net.
Background of the Tax Freeze
The tax threshold has been frozen since 2021, and in the last Budget, Ms Reeves extended the freeze until 2031. This policy, known as fiscal drag, has forced millions of low-income workers and pensioners to pay income tax as wages rise. The Institute for Fiscal Studies (IFS) has warned that it hits the lowest paid hardest.
New Petition Launched
A new petition on the parliament website, created by Geoffrey Lawson, urges the government to raise the personal allowance to £14,000 for all Brits. Lawson argues that the Chancellor's proposals unfairly favour pensioners retiring after 2016 with the new state pension, discriminating against older pensioners who paid into SERPS or the second state pension.
The petition states: "Raise the income tax personal allowance from £12,570 to £14,000 to cover the State Pension. This will put all State pensioners, including older pensioners who have paid into SERPS or the State second pension, on an equal footing until the end of this Parliament."
Commons Debate on Tax Thresholds
Pressure on Ms Reeves intensified this week after a Westminster Hall debate on June 15, 2026, sparked by a previous e-petition with over 120,000 signatures calling for the tax-free allowance for pensioners to be doubled to £25,140. Cross-party MPs raised concerns that the triple lock on state pensions, combined with frozen thresholds, is dragging thousands of older people into paying income tax.
Conservative MP John Lamont, who opened the debate, said that dealing with unexpected tax bills from HMRC or completing self-assessment forms can be "both distressing and deeply worrying for those hard-pressed pensioners."
Government Rejection of Doubling Allowance
Pensions Minister Torsten Bell delivered a clear rejection to campaigners, stating that "no political party will deliver a doubling of the personal allowance for pensioners." He explained that such an increase would cost "several billion pounds each year," conflicting with the government's priorities of raising the basic state pension and rescuing the NHS.
Bell defended the freeze as necessary for sustainable public finances, noting that over 80% of pensioners were already paying income tax by the end of the previous Conservative administration. He stressed that the tax system remains progressive, with those who have more contributing more.
Administrative Relief for Pensioners
While rejecting the £25,140 threshold, Bell confirmed upcoming administrative relief. The forthcoming Finance Bill will include measures to ease the burden on older taxpayers, ensuring they will not have to deal with the "simple assessment" process to pay small amounts of tax from 2027-28.
Bell also highlighted the 4.8% increase in the basic and new state pensions in April, boosting pensioner incomes by up to £575 a year, and a similar increase in the pension credit minimum guarantee to protect the poorest pensioners.
Cross-Party Consensus
Despite the rejection, MPs across the house agreed that pensioners deserve dignity, security, and peace of mind in retirement. The debate underscored the growing concern over fiscal drag and its impact on the most vulnerable.
The new petition aiming for a £14,000 threshold is now open for signatures, as campaigners continue to push for change.
