Thousands of UK pensioners and low-income earners are demanding an increase in the personal tax allowance from £12,570 to £20,000, arguing that it would provide financial relief and reduce reliance on benefits.

Over 12,000 people have signed an online petition, triggering a mandatory response from the government, with the Treasury expected to address the issue soon.

The government has frozen the personal allowance at £12,570 until at least 2028/29, meaning more pensioners will find themselves paying income tax as the State Pension increases.

In the 2024/25 tax year, the full New State Pension is £11,502 and will rise to £11,973 in 2025/26, leaving only a small gap before retirees exceed the tax threshold.

Although those solely reliant on the State Pension won’t be taxed, many pensioners receiving workplace pensions or part-time earnings are now being pulled into the tax system.

Currently, 62% of the UK’s 12.9 million pensioners already pay tax, a number expected to rise as the allowance remains frozen.

Petition creator Alan David Frost argues that pensioners should not be taxed on their State Pension, stating that an increased allowance would help low earners become less dependent on government support while also boosting the economy.

“We believe it’s unfair to tax pensioners on their State Pension when it barely surpasses the personal allowance. Raising the threshold would also lift many low earners out of the tax system and increase spending in the economy,” the petition states.

If the petition reaches 100,000 signatures, it will be considered for debate in Parliament.

Last month, Liberal Democrat MP Ben Maguire called on Chancellor Rachel Reeves to assess the benefits of raising the tax-free allowance for pensioners to £15,000, but the government has not indicated any plans to revise the threshold.

In response, Treasury Minister James Murray MP said that while the government wants to keep taxes low for pensioners, it must also focus on fiscal stability.

Pensioners currently pay 20% tax in England and Wales on income exceeding £12,570, while Scotland has a tiered system starting at 19% for income over the threshold.

For example, a pensioner with a total annual income of £13,000 would only be taxed on the £430 above the threshold, meaning they would owe around £86 at the basic rate. However, as the State Pension continues to increase, more retirees will be pushed into taxation.

With rising living costs and growing frustration among pensioners, the campaign for a £20,000 tax-free allowance is gaining traction.

If the petition continues to attract support, Parliament may be forced to consider a debate on the issue. Until then, pensioners await the government’s formal response, hoping for a policy shift that would ease their financial burden.