A staggering 84,000 people have rallied behind a campaign petitioning Chancellor Rachel Reeves to increase the tax threshold for state pensions in the upcoming Spring Statement. Spearheaded by Dennis Reed on change.org, the movement has gained traction due to concerns over the stagnant personal allowance of £12,570. The petition’s popularity surges as there are strong demands for the personal tax allowance’s lowest band to be raised from £12,570 to £20,000. With the Spring Statement scheduled for March 26, campaigners eagerly await Ms Reeves’ announcement, hoping for a favourable adjustment.

Dennis Reed expressed his worries on the change.org petition about pensioners’ shrinking incomes, arguing that not raising the tax threshold would strike a “double whammy” following the Government’s choice to means-test the Winter Fuel Allowance payment. He stated: “Because of the frozen tax personal allowances, the top of the new state pension may breach the current personal allowance of £12,570 in 2026. This would lead to the ludicrous situation of the state pension safety net, which has already been paid for through National Insurance and tax, being taxed again. Many more pensioners across the country would be plunged into poverty as a result of political choice.”

Dennis emphasised the dire situation for individuals like 75-year-old widow Colette, who is at risk of poverty unless there’s an increase in the threshold. Echoing these concerns, Susan, another widow who backed the petition, expressed her frustration: “I resent the fact that my husband and I paid full taxes all of our lives and yet still the pensions that we worked hard for are taxed, most unfairly, the tax taken from my state pension would help significantly towards my basic disability extras needed.”

The threshold freeze since 2021 has inadvertently ensnared millions of modest earners into the tax fold due to ‘fiscal drag’. Currently, incomes over £12,570 fall into the 20% tax bracket, reports Lancs Live.

Alan Frost, who started the petition, has urged the Government to “Raise the income tax personal allowance from £12,570 to £20,000. We think this would help low earners to get off benefits and allow pensioners a decent income.”

Despite the call for action, a Treasury spokesperson said: “The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility.”

They continued: “The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. The Government has no plans to increase the Personal Allowance to £20,000. Increasing the Personal Allowance to £20,000 would come at a significant fiscal cost of many billions of pounds per annum.

“This would reduce tax receipts substantially, decreasing funds available for the UK’s hospitals, schools, and other essential public services that we all rely on. It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible.

“The Government keeps all taxes under review as part of the policy-making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.”

Tax thresholds remain static amid escalating living costs. The basic rate of 20% tax kicks in at earnings of £12,570, with the higher rate of 40% starting at £50,270. Both thresholds have been frozen since 2021.

To view the petition, click here.