𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Pressure will mount on Rachel Reeves to give pensioners a tax break when a key event happens in eight days as MPs clash. The huge campaign pushed for a change in the rules which would double the UK state pension tax threshold to £25,140 – from the present £12,570.

A now-closed petition on the Parliament website gathered 119,206 signatures, and officials have confirmed it will be debated by MPs on June 15 – piling additional pressure on Ms Reeves, as Treasury ministers will be forced to outline their policy position.

Currently, the personal allowance sits at £12,570 before people become liable for income tax. Projections indicate that by 2027, the state pension will surpass this amount as a result of the triple lock mechanism meaning millions more OAPs face paying tax on their income.

While Ms Reeves has suggested that those receiving only the full new state pension will not incur a tax liability, numerous others risk being dragged into paying extra tax.

The petition demands that pensioners be given a separate tax code, allowing them to earn up to £25,140 tax-free. The upcoming parliamentary debate means Ms Reeves’ Treasury will be obliged to justify its stance and provide clarity on its future plans. The petition suggests that pensioners should enjoy a £25,140 earnings threshold before becoming liable for tax – twice the current £12,570 personal allowance.

During her second Budget, the Chancellor unveiled tax rises totalling £26 billion spanning multiple sectors, characterised at the time as a “smorgasbord” strategy designed to create extra fiscal room for her spending and borrowing plans. Among the measures was the decision to maintain frozen income tax thresholds, despite widespread speculation that the main rate could rise for the first time in decades. This kept the basic personal tax allowance at £12,570 until 2031, a move that could have significant implications for state pensioners.

The petition states: “Introduce new tax code for state pensioners with double the personal allowance. We want the government to introduce a new tax code for state pensioners, set at double the basic threshold. If this was implemented, pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax.

“We think that people with small private or workplace pensions are currently being taxed unfairly.”

The Treasury issued a response to the petition after it exceeded 10,000 signatures. It stated: “The State Pension is the foundation of support for pensioners. The Government is committed to a fair tax system but doubling the Personal Allowance for pensioners would be untargeted and costly.

“The State Pension is the foundation of support available to pensioners. The government is committed to the Triple Lock – one of the most generous State Pension uprating mechanisms in the world – for the duration of this Parliament. This will increase the basic and new State Pension by 4.8% next April, boosting pensioner incomes by up to £575 a year and strengthening retirement security.

“The Personal Allowance is already the highest amongst G7 countries. Doubling this allowance for all pensioners would be costly and untargeted – disproportionately benefiting higher-income pensioners.

“As announced at the Budget, the government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28, if the new or basic State Pension exceeds the Personal Allowance from that point. The government is exploring the best way to achieve this and will set out more detail next year [2026].”

In her Budget speech last November, Ms Reeves promised that pensioners whose only income is the full new state pension would be protected from taxation and the need to file tax returns, though she stopped short of outlining exactly how this would be implemented. The Treasury has subsequently confirmed it will develop detailed plans over the course of 2026.

To view the petition, click here.