More than 12,000 citizens have thrown their support behind an online petition calling on the UK Government to increase the personal tax allowance from £12,570 to £20,000. The campaign’s goal is to aid low-earners “get off benefits and allow pensioners a decent income”.

Since the petition has accumulated more than the 10,000 signatures required, it stands in line for a formal response, likely from the Treasury itself. Despite the government’s recent confirmation to freeze the Personal Allowance at the current level until the start of the 2028/29 financial year, petitioner Alan David Frost argues that levying taxes on pensioners earning above this threshold is downright “abhorrent to tax pensioners on their State Pension when it is over the personal allowance”.

Frost believes that increasing the allowance would boost the economy by giving people more spending power, reports the Daily Record.

The petition, advocating for the raise of the income tax personal allowance to £20,000, claims: “We think this would help low earners to get off benefits and allow pensioners a decent income.”

It goes on to highlight: “We think it is abhorrent to tax pensioners on their State Pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth.”

Should the campaign secure 100,000 signatures, the matter could escalate to Parliamentary debate, as it would come under scrutiny by the Petitions Committee. For those wishing to delve deeper into the specifics, the full petition is available for perusal here.

Liberal Democrat MP Ben Maguire urged Chancellor Rachel Reeves to mull over the merits of increasing the tax allowance for individuals over State Pension age to £15,000 last month. In response, Treasury Minister James Murray MP wrote that while the Labour Government “is committed to keeping taxes as low as possible for pensioners while ensuring fiscal responsibility”, he sidestepped directly addressing the proposal to evaluate a hike in the income tax threshold.

The full New State Pension is pegged at £11,502 for the 2024/25 tax year, and this amount is due to climb to £11,973 in 2025/26. Currently, there’s a negligible £1,068 margin before exceeding the tax threshold this year, narrowing down to just £597 in 2025/26.

Recipients of the full New State Pension avoid income tax. Nevertheless, seniors with extra income sources from work or personal or company pensions may confront taxation obligations.

For the majority, tax would be collected via PAYE on earnings and levied on private pensions. Those not covered by automatic tax deductions can anticipate a tax demand from HMRC the subsequent summer, payable by January the following year.

Endless conjecture surrounds how many retirees will face tax bills. At present, with nearly 8 million of the UK’s 12.9 million State Pension recipients (approximately 62%) already contributing some tax upon retirement, the concept is far from unprecedented.

As we enter the 13th year of auto-enrolment in the workplace, more people are set to benefit from a boost in retirement income, which will likely be subject to tax—typically deducted from their private pension. Any tax due in retirement is based on the amount of income earned above the threshold, not the total additional income.

For example, if someone has a total annual income of £13,000, they will pay tax on £430—the amount exceeding the £12,570 threshold. State Pension payments for 2025/26 will rise from April 7.

However, recipients won’t see an immediate increase as this contributory benefit is paid in arrears. To predict your future State Pension payments, use the online tool available on GOV.UK.