Prime Minister Andy Burnham has issued an update on his plans for the personal allowance, the threshold at which individuals start paying income tax, currently set at £12,570. The threshold has been frozen since 2021, dragging more low earners and pensioners into paying income tax as their incomes rose.
Burnham's Statement to Reporters
Speaking to reporters, Burnham appeared to row back on suggestions that the rate could be raised, saying he would "look at it at the Budget alongside everything else." However, he added there was "no commitment, no unfunded promise."
Burnham said: "I want to answer questions honestly in this job, as I said before. I think that's all about trust in politics and doing politics differently, and I'm determined to keep working in that way. It was raised a lot, but I then went on to say, 'but we'll have to look at it at the budget alongside everything else'. So no commitment, no unfunded promise. There is no commitment at this point to change, but we will look at that at the Budget."
Potential Cost-of-Living Boost
Raising the personal allowance would allow more low-income households to keep more of what they earn, delivering a major cost-of-living boost. The freeze has effectively increased the tax burden on millions as wages have grown with inflation.
The Prime Minister's comments come after reports that he was preparing to raise the allowance. However, his cautious tone suggests no immediate action is planned, with all eyes now on the upcoming Budget.
