Campaigners have called for the government to end the freeze on the personal allowance threshold, describing its continuation as unjust amid ongoing cost-of-living pressures. The personal allowance—the amount of income individuals can earn before paying income tax—has remained frozen at £12,570 since 2021 and is scheduled to stay at that level until 2031.
Dennis Reed, director of the over-60s advocacy group Silver Voices, delivered a petition signed by 275,000 people to Downing Street on Tuesday, urging Prime Minister Andy Burnham to increase the threshold by at least £1,000. Reed argued that the freeze disproportionately affects older people on modest incomes, who now face an effective tax rise as inflation and pay rises push them closer to or above the current threshold.
“It’s a real scandal that the personal allowance has been frozen,” Reed said. “People have lost £3,500 of tax-free income, which is a significant financial blow. If the threshold had kept pace with inflation, it would now exceed £16,000. This impacts low earners the hardest.”
The personal allowance’s static level coincides with significant increases in the state pension, which is set to outpace the threshold in April due to the triple lock formula. This mechanism ensures state pensions rise annually by the highest of average earnings growth, inflation, or 2.5%. As a result, some pensioners are expected to begin paying income tax on their pensions for the first time.
Labour has previously stated that individuals whose only income is the state pension would not be liable for income tax, but further details have yet to be confirmed. Reed referenced comments by Andy Burnham during his recent by-election campaign suggesting the threshold’s impact would be reviewed, and pressed the Prime Minister to provide clarity ahead of next week’s Budget announcement.
Meanwhile, The Daily Express has planned a demonstration at Parliament Square on October 28 at 11 a.m., preceding Chancellor John Healey’s Budget statement. The event, organized in partnership with Silver Voices, invites supporters of the campaign to “Save Our Pension Triple Lock” to join in advocating for tax relief measures to protect pensioners and low-income earners amid rising living costs.
