UK Petition Demands Increase in Personal Tax Allowance to £20,000 – What It Means for You

A growing number of UK citizens are calling for an increase in the personal tax allowance from £12,570 to £20,000. A petition has been launched urging the government to consider this change, which could significantly benefit pensioners and low-income earners. The initiative aims to help people transition away from benefits while ensuring pensioners receive a fairer income.

However, the UK government has confirmed that the personal tax allowance will remain frozen at £12,570 until 2028. Despite this, the petition has gained traction, with thousands of people supporting it. If it reaches 100,000 signatures, it may be debated in Parliament.

This article explores why the petition was launched, what it means for taxpayers, and whether there is a real possibility of change.

Why Is There a Demand for a Higher Tax Allowance?

The personal tax allowance determines how much income you can earn before paying tax. Currently, it stands at £12,570, meaning anyone earning above this amount must pay income tax. However, as living costs continue to rise, many people feel that this threshold is too low.

Supporters of the petition argue that:

• Low earners struggle to make ends meet – Increasing the tax-free allowance would help workers who earn close to the current threshold.
• Pensioners are unfairly taxed – The full New State Pension is expected to rise to £11,973 in 2025/26, meaning pensioners with any additional income (such as a private pension or part-time work) will have to pay tax.
• More money in people’s pockets – A higher tax allowance would leave more disposable income for individuals, boosting the economy.

Government’s Response to the Petition

The government has acknowledged the petition but has not committed to increasing the personal allowance. Treasury Minister James Murray MP stated that the government is focused on keeping taxes low for pensioners while maintaining financial stability. However, he did not address whether raising the tax threshold is under consideration.

At present, the government has frozen the personal tax allowance at £12,570 until at least 2028. This means that, even as wages and pensions rise, more people will end up paying tax.

How Pensioners Are Affected

Pensioners are particularly affected by the tax allowance freeze. Currently, the full New State Pension is set to reach £11,973 in 2025/26. This leaves a small gap before pensioners hit the tax threshold.

• If a pensioner receives any additional income from part-time work or a private pension, they could quickly exceed the tax-free limit and be required to pay tax.
• Around 8 million of the UK’s 12.9 million pensioners already pay tax on their income.
• Many pensioners feel it is unfair to tax the State Pension, as it is the result of a lifetime of contributions.

Tax Rates and Thresholds Explained

Income tax rates vary between England and Scotland. Here’s a breakdown of how much tax people pay based on their earnings:

England & Wales Tax Rates

• £12,571 – £50,270: 20% tax rate
• £50,271 – £125,140: 40% tax rate
• Above £125,140: 45% tax rate

Scotland Tax Rates

• £12,571 – £14,876: 19% tax rate
• £14,877 – £26,561: 20% tax rate
• £26,562 – £43,662: 21% tax rate
• £43,663 – £75,000: 42% tax rate
• Above £75,000: 47% tax rate

If the tax-free threshold were raised to £20,000, people earning below this amount would not have to pay any income tax, helping them retain more of their earnings.

Will the Petition Lead to Change?

As of now, the petition has over 10,000 signatures, which means the government is required to respond. If it reaches 100,000 signatures, it will be considered for debate in Parliament.

However, increasing the tax-free allowance would result in lower government tax revenues, which could impact public spending. The government may be reluctant to make this change without finding an alternative source of revenue.

Conclusion

The campaign to raise the personal tax allowance to £20,000 has gained significant support, particularly among pensioners and low-income earners. While the government has yet to commit to any changes, the discussion highlights the financial struggles many people face in the current economy.

If you support this initiative, you can sign the petition or follow updates on government responses. In the meantime, understanding your tax obligations and financial options is crucial to managing your income effectively.

This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.