The petition was started by Timothy Hugh Mason, and it called on HMRC to: “Introduce (a) new tax code for state pensioners with double the personal allowance

It continued: “We want the government to introduce a new tax code for state pensioners, set at double the basic threshold. If this was implemented, pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax.

“We think that people with small private or workplace pensions are currently being taxed unfairly.”

The petition can still be signed here until April 2026.

The government has responded to this, saying: “The State Pension is the foundation of support for pensioners. The Government is committed to a fair tax system but doubling the Personal Allowance for pensioners would be untargeted and costly.”

But there is some good news for pensioners, which the statement highlights: “As announced at the Budget, the government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28, if the new or basic State Pension exceeds the Personal Allowance from that point.

“The government is exploring the best way to achieve this and will set out more detail next year.”

How will HMRC personal allowance change for pensioners next year?

In the autumn budget, Chancellor Rachel Reeves said that pensioners wouldn’t be made to pay small amounts of tax on their state pensions if they exceed the £12,570 limit.

But, it wasn’t clear how that would work, or if it would involve an increase in personal allowance. Speaking to Martin Lewis afterwards, Ms Reeves clarified, saying: “So if you just have a state pension, we are not going to make you fill in a tax return of any type. Yes, and so we make that commitment for this parliament. You’re right. 2027 looks like the time that it will cross over.

“We are working on a solution as we speak, to ensure that we’re not going after tiny amounts of money.”

News! From 2027, the full new state pension will be higher than the tax-free allowance, so tax is due. The Chancellor had said people wouldn’t need to do assessments, but on my show tonight, Rachel Reeves said, they won’t pay tax at all this parliament. Watch the full show &… pic.twitter.com/Uo176F0xm1

— Martin Lewis (@MartinSLewis) November 27, 2025

Martin Lewis then asked: “But people will have to pay the tax, they just won’t have to do a return, or will they not have to pay the tax?” to which, the Chancellor clarified: “In this Parliament, they won’t have to pay the tax, we’re just looking at a simple workaround at the moment.”

To this, he added: “Okay, so I haven’t actually got that from the budget, so that’s really good to have clarity that they won’t be paying the tax.”

This follows analysis by former Pensions Minister Sir Steve Webb, who said ahead of the budget: “The standard rate of the new state pension is creeping ever closer to the frozen personal tax allowance.

“Indeed, we know for certain that someone who has no other income aside from the new state pension will be a taxpayer come April 2027.

“It is already the case that nearly three quarters of all pensioners pay income tax, and the ongoing freeze in tax thresholds coupled with steady rises in the pension will drag more and more into the tax net”.

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What is the Personal Tax Allowance?

The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

It decreases if your income is over £100,000. For every £2 you earn over £100,000, you lose £1 of your tax-free Personal Allowance.

This amount has been frozen since 2021.