The campaign has attracted attention after frozen tax thresholds led to more people paying income tax as earnings increased. The issue has become part of wider discussions around the effect of fiscal drag on households and pensioners.
Petition Reaches Towards Parliamentary Debate Threshold
The petition, created by Mike Haynes, argues that the current personal allowance should be increased after being frozen at £12,570 since 2021. According to the campaign text, the freeze has meant some people on lower incomes may begin paying tax as wages rise, while some higher earners can reduce their tax bills through existing rules.
The petition has already passed 10,000 signatures, which resulted in an official response from the Treasury. It is now seeking 100,000 signatures, the level required for the issue to be considered for debate in Parliament. The deadline for supporters to sign is 30 September 2026.
According to the Treasury response, the government currently has no plans to raise the personal allowance to £18,000. The department said such a move would have a fiscal cost of more than £40 billion per year and would also provide greater benefits to higher earners on average than to basic-rate taxpayers.
The government response stated that income tax thresholds were previously frozen from the 2021/22 tax year until 2027/28. It added that the 2025 Budget extended the freeze on personal tax thresholds, including the personal allowance, for a further three years until the end of the decade.
Frozen Thresholds Increase Tax Pressure on Households and Pensioners
The debate over the personal allowance comes as figures show rising income tax payments among retired people. According to newly released HMRC figures, pensioners paid around £29.8 billion in income tax last year, compared with £21.1 billion two years earlier.
The increase has been linked by industry experts to frozen allowances and thresholds, which can move more taxpayers into higher tax bands as their incomes rise. Steve Webb, partner at LCP and former pensions minister, said the freezing of thresholds had brought millions more people into paying higher rates of income tax.
Webb also highlighted that the number of pensioners paying income tax had increased as allowances remained unchanged. He said the growing tax contributions from retirees were part of the wider discussion about fairness between generations.
The number of higher-rate taxpayers reached 6.6 million during the last financial year, according to reports. HMRC figures also showed that the cost of pension tax relief increased from £47.8 billion in the 2023/24 tax year to £60.4 billion in 2024/25.
Andy Burnham has previously said the issue of the personal allowance was raised frequently during his campaigning and had stayed with him. The prime minister has said that the matter will be reviewed at the next Budget, while also acknowledging that changing the allowance would be difficult given current financial conditions.
The government has maintained that its current approach is focused on keeping taxes for working people as low as possible while funding public services and maintaining economic stability.
