More than 81,000 people have signed an online petition urging Chancellor Reeves to raise the £12,570 Personal Allowance for pensioners.
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An online petition on Change.org urging Chancellor Rachel Reeves to raise the Personal Allowance tax threshold for State Pensions in this year’s Spring Statement has been signed by more than 81,000 people. It is expected to pass the 100,000 signature milestone by March 26, the date of the Labour Government’s financial event.
The petition was launched by Dennis Reed, a longtime campaigner for older people’s rights. In 2024, he successfully lobbied the then-Conservative government to retain the Triple Lock for State Pensions in its final Budget and built on his success by ensuring all major political parties also committed to the Triple Lock policy in their 2024 manifestos.
Under the Triple Lock policy, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent.
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However, despite this safeguard, Dennis is still concerned about the state of pensioners’ incomes; and says that a failure to increase the tax threshold – which will be frozen at £12,570 until the 2027/28 financial year – would be a “double whammy” after the Government’s decision to means-test the Winter Fuel Payment.
Explaining the problem with the current threshold, Dennis said: “Because of the frozen tax Personal Allowances, the top of the New State Pension may breach the current Personal Allowance of £12,570 in 2026.
“This would lead to the ludicrous situation of the State Pension safety net, which has already been paid for through National Insurance and tax, being taxed again.
“Many more pensioners across the country would be plunged into poverty as a result of political choice.”
You can read the full petition on Change.org here.
The annual Department for Work and Pensions (DWP) uprating next month will see the New and Basic State Pensions rise by 4.1 per cent, however, future forecasts from the Labour Government expect it to rise by 2.5 per cent over the next four financial years.
Using these forecasts, it means the full New State Pension is on track to be worth £12,578.80 in the 2027/28 financial year – £78.80 over the Personal Allowance.
While the amount of State Pension to be taxed may seem relatively small, older people with other income streams could find themselves having to part with more cash to pay a tax bill – if it’s not automatically deducted from private or workplace pensions through PAYE.
The Labour Government has pledged to honour the Triple Lock or the duration of its term and the latest predictions show the following projected annual increases:
- 2025/26 – 4.1%, the forecast was 4%
- 2026/27 – 2.5%
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%
State Pension payments 2025/26
The DWP has published the full list of State Pension and benefit uprated payments on GOV.UK here, which also includes additional elements such as the deferred rates, which are rising by 1.7 per cent (September Consumer Price Index inflation rate).
Full New State Pension
- Weekly payment: £230.25 (from £221.20)
- Four-weekly payment: £921 (from £884.80)
- Annual amount: £11,973 (from £11,502)
Full Basic State Pension
- Weekly payment: £176.45 (from £169.50)
- Four-weekly payment: £705.80 (from £678)
- Annual amount: £9,175 (from £8,814)
Future new State Pension forecasts
Under a 2.5 per cent increase, the full New State Pension will be worth:
- 2026/27 – £236 per week, £12,227.30 a year
- 2027/28 – £241.90 per week, £12,578.80 a year
