A petition with 120,000 signatures is urging the government to double the HMRC personal tax-free allowance for state pensioners to £25,140. The Labour Party is set to debate this parliamentary plea on June 15.
Currently, the personal allowance is £12,570. The petition calls for a new tax code for state pensioners with double that threshold. It argues that individuals with small private or workplace pensions are being taxed unfairly.
If implemented, pensioners would benefit from a higher tax-exempt limit, while wealthier pensioners would still pay tax. The petition states: "We want the government to introduce a new tax code for state pensioners, set at double the basic threshold."
For those earning above £100,000, the personal allowance is reduced by £1 for every £2 over that limit. Those earning £125,140 or more in 2026-27 receive no personal allowance, though pension contributions can mitigate this.
Savings interest allowances also apply: basic-rate taxpayers can earn up to £1,000 tax-free, higher-rate taxpayers up to £500, and additional-rate taxpayers none. Non-taxpayers (income under £12,570) can earn up to £18,570 in interest-free savings.
HM Treasury responded: "The State Pension is the foundation of support available to pensioners. The government is committed to the Triple Lock. The Personal Allowance is already the highest amongst G7 countries. Doubling this allowance for all pensioners would be costly and untargeted, disproportionately benefitting higher income pensioners."
They added that from 2027-28, pensioners whose sole income is the basic or new State Pension will not have to pay small amounts of tax via Simple Assessment. More details will be set out next year.
The debate will be streamed on the UK Parliament YouTube channel.
