A rising public demand to increase the UK’s income tax personal allowance from £12,570 to £20,000 has gained serious traction, as a petition started by Alan David Frost crossed the key 100,000 signature mark, ensuring it must be considered for a Parliamentary debate. With over 133,000 supporters and growing, the campaign highlights the financial strain on low income workers and pensioners.
What Is the Personal Tax Allowance?
The Personal Allowance is the amount you can earn before paying income tax. Right now, it’s set at £12,570 and has been stuck there since 2021. With rising wages and inflation, this frozen limit is dragging more low earners into the tax net.
Why Push for a £20,000 Allowance?
The petition claims raising the threshold would:
- Boost Low Earners
A higher allowance would mean more people pay no income tax, increasing their take home pay and easing the cost of living crunch. - Help Pensioners
Many pensioners get just over the current allowance from their State Pension, so they’re taxed despite fixed incomes. A £20,000 limit would free most retirees from taxes. - Cut Benefit Reliance
More take home cash could reduce the need for benefits like Universal Credit, lowering dependence on government aid. - Grow the Economy
Extra money in pockets could spark more spending, giving the economy a lift.
Potential Tax Savings
If the change happens, taxpayers could see big benefits:
| Income Level | Annual Tax Savings (Basic Rate) |
|---|---|
| £20,000 | £1,486 |
| £15,000 | £486 |
| £12,570 | £0 (No tax currently) |
What Are the Drawbacks?
Loss of Funds
Raising the allowance could cost the government £40 to £50 billion a year, straining public budgets.
Service or Tax Changes
To balance this, cuts to public services or hikes in taxes like VAT or National Insurance might be needed.
Inflation Worries
More spending power could drive up prices, making the cost of living crisis worse.
What Happens Next?
UK petitions follow a clear path:
- At 10,000 signatures, the government must respond.
- At 100,000 signatures, the issue qualifies for a possible Parliamentary debate.
- The petition is live until 20 June 2025, and more signatures can be added online.
Whether it becomes law depends on the debate, government views, and budget choices.
Government’s Stance So Far
The former Conservative government froze the allowance until April 2028, saying it was needed to manage debt after the pandemic. Critics call this a hidden tax, pulling more people into paying income tax as earnings rise.
Any increase would need balancing measures, like new taxes or spending cuts, to keep finances stable.
What Is Marriage Allowance?
Couples can benefit from the Marriage Allowance, where one partner can transfer £1,260 of their unused Personal Allowance to the other, if eligible. This could save up to £252 a year in taxes.
Older couples, where one partner was born before 6 April 1935, might also qualify for the Married Couple’s Allowance, offering extra tax relief.
A Big Policy Change?
Lifting the Personal Allowance to £20,000 would be one of the biggest tax reforms in recent UK history. The benefits for low earners and pensioners are clear, but the costs and political will remain uncertain.
The petition is open until 20 June 2025, and supporters can add their names on the UK Government’s petition website.
FAQs
What is the current UK Personal Allowance?
The standard allowance is £12,570. You don’t pay tax on income below this.
Why raise the allowance to £20,000?
To support low earners, help pensioners, reduce benefit needs, and boost the economy with more take home pay.
How much tax could I save?
A basic rate taxpayer could save up to £1,486 a year with a £20,000 allowance.
Will Parliament discuss this?
Yes, with over 100,000 signatures, it qualifies for consideration for a debate.
Is the petition still open?
Yes, you can sign until 20 June 2025.
