The UK government is facing mounting calls to raise the Personal Tax Allowance for state pensioners, as campaigners warn that frozen tax thresholds could leave retirees paying more in income tax.
A petition led by Silver Voices has urged Chancellor Rachel Reeves to increase the allowance by at least £1,000 in the upcoming Spring Statement, aligning future increases with the Triple Lock mechanism.
With the state pension expected to exceed the current £12,570 tax-free allowance by 2026, many pensioners could find themselves paying tax on their retirement income for the first time.
Frozen Tax Thresholds Could Push Pensioners Into Higher Tax Brackets
According to Dennis Reed, director of Silver Voices, pensioners are being dragged into taxation due to the government’s failure to adjust tax thresholds in line with rising pensions.
The Personal Tax Allowance has remained at £12,570 since 2021, while the state pension has increased annually under the Triple Lock, which guarantees growth based on inflation, wage increases, or 2.5%—whichever is highest.
Reed argues that if the tax threshold is not adjusted, more pensioners will see their retirement income taxed, even if they rely solely on the state pension.
Writing on Change.org, he urged the government to act, stating:
“Will you stand up to protect older people and call on the Chancellor to increase the tax threshold for state pensioners by at least £1,000?”
The issue has sparked frustration among retirees, many of whom feel penalised after decades of paying into the system. Some pensioners argue that taxation on pensions discourages savings and creates financial hardship, particularly with the removal of universal Winter Fuel Payments for certain groups.
Growing Discontent Over Pensioner Taxation and Government Spending
Public sentiment on the matter has been vocal, with many pensioners questioning government priorities. Some have criticised the allocation of funds to international aid and net zero initiatives while domestic concerns, such as pensioner welfare and farming subsidies, receive less attention.
A pensioner commenting on the issue stated:
“we pay huge amount of tax during our working lifewhilst we plan and save for our retirement, only to get taxed again on our savings and pension. It is time for this to stop and to at least reward those who save and plan with no tax on our pensions, if this does not happen then, why bother to save at all?”
Another individual echoed these frustrations, arguing that MPs and high earners are insulated from such financial pressures, while many pensioners are struggling with rising living costs.
