State Pension £12.5k to £20k tax free threshold | U.Ok.Finance News
An online petition urging the UK authorities to raise the income tax personal allowance for all working Brits and state pensioners from £12,570 to £20,000 has up to now gained 259,454 signatures.David Allan Frost, who began the petition, stated: “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.”The petition’s web web page has been up to date to say that parliament debated the subject on May 12, 2025, and a response was given earlier on February 20. To be debated, a petition wants 100,000 or more signatures, and the ultimate date for signatures is June 20, 2025.The response stated: “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 important fiscal value of many billions of kilos every year.”Another petition calling on the Labour government to stop Brits paying tax on their state pension has been signed by 6,042 people. David Bresnahan, who registered the petition, said: “We assume it’s improper to tax the state pension.”The full state pension pays £230.25 per week, or £11,973 a year. Pensioners on the basic state pension, which only requires 10 years of National Insurance contributions rather than 35, get £176.45 per week. If pensioners have no additional income, it is unlikely they will pay tax as the personal tax allowance starts at earnings of £12,570 or more.Some older pensioners may pay tax on their state pension because Brits who retired before April 2016 were part of a system that included the additional state pension or state earnings-related pension scheme (SERPS).Pension experts at Spencer Churchill Claims Advice suggest that the petition underscores a broader issue concerning the tax system’s treatment of the elderly.”There’s growing frustration amongst pensioners who really feel that taxing the state pension, after a lifetime of National Insurance contributions, is basically unfair,” said a spokesperson from Spencer Churchill. “While many retirees do not exceed the personal allowance, a rising quantity with modest personal pensions are being pulled into the tax internet. The present petition displays a wider call for reform.”
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