The government is under mounting pressure to address calls for a significant tax break for state pensioners, with a crucial update expected within the next 48 hours.
Petition Demands Fairer Tax for Pensioners
A petition on the official Parliamentary website is calling on the Labour government to create a new tax code exclusively for state pensioners. The proposal would effectively double the basic personal tax allowance for this group, raising it from the current £12,570 to a new threshold.
The petition argues that "people with small private or workplace pensions are currently being taxed unfairly." It clarifies that while pensioners with smaller incomes would benefit from a higher tax-exempt limit, wealthier pensioners would still be required to pay tax.
Race to Reach 100,000 Signatures
So far, the campaign has garnered 16,119 signatures. While this is a significant show of support, it remains some way off the 100,000 signatures needed to automatically trigger a debate in Parliament.
However, the government has a policy of responding to all petitions that receive more than 10,000 signatures. The petition's status is now officially listed as "waiting for 2 days for a government response," signalling that a formal answer from the Treasury is imminent.
This is not the first time the issue has been raised. A previous petition demanding the same £20,000 threshold closed this summer after collecting a massive 281,792 signatures. This made it one of the most-signed petitions on the site and did lead to a full Parliamentary debate.
Public Outcry and Treasury Concerns
Pensioners and supporters have voiced strong opinions on the matter. One working pensioner commented, "As a working pensioner, the state pension is taken away from the tax allowance so you end up with nothing!... So it’s beginning to look as though there’s no point in working."
Another stated, "There should be no pensioners paying tax on their state pension, we have the lowest pension in the G7 to start with."
Despite the public pressure, the Treasury has previously expressed major concerns about the cost of such a policy. James Murray, Exchequer Secretary to the Treasury, has warned that raising the allowance to £20,000 would come with a staggering price tag of over £50 billion. This figure notably exceeds the £45 billion in unfunded tax cuts announced in the infamous mini-Budget under former Prime Minister Liz Truss.
The government's response, due within the next two days, will be closely watched to see if it offers any compromise or reaffirms its stance on the fiscal unfeasibility of the proposal.