A petition to raise income tax thresholds to “help low earners” has passed a significant milestone this week, garnering more than enough signatures to trigger a response from the Government.
Campaigners are calling for an increase in the income tax personal allowance from £12,570 to £20,000 to help benefit claimants and pensioners.
Alan Frost, who launched the petition, wrote: “Raise the income tax personal allowance from £12,570 to £20000. We think this would help low earners to get off benefits and allow pensioners a decent income.”
He added: “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.”
A petition will trigger a Government response when it reaches 10,000 signatures. At 100,000 signatures, petitions are considered for a debate in parliament.
At the time of writing, the petition has gained more than 70,000 signatures.
The personal allowance, which has been frozen since 2021, reflects the amount of money a person can earn before they start paying taxes on it.
The former Conservative Government froze the threshold until April 2028, and Chancellor Rachel Reeves opted to keep this intact when announcing the Labour’s fiscal policies during her maiden Budget last October.
However, freezing the thresholds has prevented them from rising with inflation and wage growth, pulling more people into higher tax brackets. This is known as “fiscal drag”.
According to the Office for Budget Responsibility (OBR), the watchdog for public finances, the freeze will drag an additional 1.3 million people into the tax net in the 2025/26 tax year, while one million more will have to pay a higher tax rate.
The number of pensioners paying income tax on their pensions is also set to increase. From this April, state pension rates will rise by 4.1%.
The full, flat-rate new state pension will rise to £11,962.60 a year, an increase of around £460. This rate is expected to exceed the personal allowance threshold in at least three years’ time.
All petitions run for six months, and the deadline to sign this one will end on May 26, 2025.
