The UK Government is facing growing pressure to increase the personal tax allowance under Rachel Reeves’ tax plan<\/strong>, as a new petition calls for a rise from \u00a312,570 to \u00a320,000<\/strong>. The proposal aims to help low-income individuals<\/strong> and pensioners retain more of their income, amid concerns that many retirees will be pushed into paying tax under Rachel Reeves’ fiscal policies<\/strong>.<\/p>\n\n\n\n
Under existing policies, the Personal Allowance<\/a><\/strong> will remain at \u00a312,570<\/strong> until at least 2028\/29<\/strong>. The full New State Pension<\/strong> for 2024\/25<\/strong> is set at \u00a311,502<\/strong>, increasing to \u00a311,973<\/strong> in 2025\/26<\/strong>. This leaves pensioners with a narrow margin before exceeding the tax threshold\u2014\u00a31,068 in 2024\/25<\/strong>, shrinking to \u00a3597 in 2025\/26<\/strong>.<\/p>\n\n\n\n
Here\u2019s how pensioners might be affected:<\/p>\n\n\n\n
The tax plan<\/strong> keeps the Personal Allowance<\/strong> frozen, more pensioners are likely to be drawn into the tax system in the coming years, raising concerns about the financial strain on retirees with modest additional income.<\/p>\n\n\n\n
The petition follows recent calls from Liberal Democrat MP Ben Maguire<\/a><\/strong>, who urged the Chancellor to consider raising the tax allowance for those above State Pension age<\/strong> to \u00a315,000<\/strong>. However, in a written response, Treasury Minister James Murray MP<\/strong> reaffirmed the Labour Government\u2019s commitment to keeping taxes as low as possible for pensioners<\/strong>, while ensuring fiscal responsibility<\/strong>.<\/p>\n\n\n\n
While the petition has sparked debate, several key figures and aspects of the issue<\/strong> are not always highlighted in discussions:<\/p>\n\n\n\n
These factors highlight the growing concerns surrounding Rachel Reeves’ tax plan<\/strong>, as pensioners and policymakers<\/strong> debate whether the current system fairly balances government revenues with the financial security of retirees.<\/p>\n\n\n\n
The government has yet to indicate any plans to raise the personal allowance<\/strong>. Tax owed on additional income is collected through PAYE<\/a><\/strong> for those with workplace pensions or employment, while others may receive a tax bill from HMRC<\/strong> each year.<\/p>\n\n\n\n
With growing public support for reform, the issue remains a point of debate. The Department for Work and Pensions<\/a> (DWP)<\/strong> is set to publish an updated list of State Pension and benefit payments<\/strong>, with adjustments expected across various pension elements.<\/p>\n\n\n\n
For individuals seeking clarity on their future State Pension payments<\/strong>, the government offers an online forecasting tool<\/strong> on GOV.UK<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"