New call for £25,140 personal tax allowance for people over State Pension age

An online petition proposes introducing a new tax code for pensioners.

More than 8,800 people have signed an online petition urging the UK Government to introduce a new tax code specifically for people over State Pension age. Petition creator Timothy Hugh Mason proposes doubling the current Personal Allowance of £12,570 to £25,140 for pensioners only.

The campaigner argues this would give pensioners a “higher tax-exempt limit, but wealthier pensioners would still pay tax” adding “we think that people with small private or workplace pensions are currently being taxed unfairly”.

The ‘Introduce new tax code for State Pensioners with double the personal allowance’ has been posted on the Petitions Parliament website. At 10,000 signatures it would be entitled to a written response from the UK Government, at 100,000 it would be considered by the Petitions Committee for debate in Parliament.

READ MORE: Millions of people over State Pension age to pay tax in new financial yearREAD MORE: Full list of New and Basic State Pension weekly payments due from April

The latest HM Revenue and Customs (HMRC) data indicates 8.7 million pensioners are projected to pay income tax on their retirement income for 2025/26. It marks an increase of around 420,000 compared to the previous year (2024/25) and a rise of 1.85m from 10 years ago (2015/16).

The data comes following the freezing of the Personal Allowance thresholds at £12,570 until April 2028, while the full annual New State Pension reached £11,973 in 2025/26, tipping hundreds of thousands more pensioners into paying income tax.

The latest figures from the Department for Work and Pensions (DWP) show there are now 13 million people of State Pension age across the country.

The UK Government has also confirmed it will honour the Triple Lock policy during this parliamentary term. However, this could see everyone on the full, New State Pension pushed over the tax threshold in just two years’ time (2027/28 financial year).

Under the Triple Lock 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 (4.8%), CPI inflation rate in the year to September (3.8%), or 2.5 per cent. Additional State Pension elements and deferred State Pensions rise each year with the September CPI figure.

An increase of 4.8 per cent will see those on the full New State Pension receive £241.30 per week, while those on the maximum Basic State Pension would receive £184.90 per week.

It’s important to remember that the amount of State Pension someone receives depends on their National Insurance contributions. To receive the full New State Pension you need around 35 years’ worth, but this may differ if you were ‘contracted out’.

The full New State Pension will increase by around £574 from April 2026 – lifting it to £12,547 per year. The uprating leaves just £36 before the Personal Allowance income threshold of £12,570 is exceeded which would see more pensioners pay tax in retirement.

The Labour Government confirmed earlier this year that the Personal Allowance will remain frozen at £12,570 until April 2028.

Chancellor Rachel Reeves will confirm the annual uprating at the Autumn Budget on November 26. An uprating of 4.8 per cent on the current State Pension would see people receive the following amounts.

Full New State PensionWeekly: £241.30 (from £230.25)Four-weekly pay period: £965.20Annual amount: £12,547Full Basic State PensionWeekly: £184.90 (from £176.45)Four-weekly pay period: £739.60Annual amount: £9,614State Pension and tax

Guidance on GOV.UK states: “You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates.

Your total income could include:

the State Pension you get – Basic or New State PensionAdditional State Pensiona private pension (workplace or personal) – you can take some of this tax-freeearnings from employment or self-employmentany taxable benefits you getany other income, such as money from investments, property or savingsCheck if you have to pay tax on your pension

Before you can check, you will need to know:

if you have a State Pension or a private pensionhow much State Pension and private pension income you will get this tax year (April 6 to April 5)the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits)

You cannot use this tool if you get:

any foreign incomeMarriage AllowanceBlind Person’s Allowance

Use this online tool at GOV.UK to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on GOV.UK here.

Get the latest Record Money news

Join the conversation on our Money Saving Scotland Facebook group for money-saving tips, the latest State Pension and benefits news, energy bill advice and cost of living updates.

Sign up to our Record Money newsletter and get the top stories sent to your inbox daily from Monday to Friday with a special cost of living edition every Thursday – sign up here.

You can also follow us on X (formerly Twitter) @Recordmoney_ for regular updates throughout the day or get money news alerts on your phone by joining our Daily Record Money WhatsApp community.