A petition demanding that pensioners receive a distinct tax code to prevent them breaching the basic income tax threshold could force a Commons debate
13:34, 28 Jan 2026Updated 14:38, 28 Jan 2026
Chancellor Rachel Reeves is being pressured over tax thresholds for state pensioners(Image: Getty Images)
A campaign advocating for vital changes to tax personal thresholds impacting pensioners hit a major landmark, potentially putting Chancellor Rachel Reeves under pressure. A petition calling for pensioners to be granted a separate tax code to stop them from exceeding the basic income tax threshold has smashed through 50,000 signatures, halfway to securing a debate in Parliament. The plan says pensioners should be able to earn £25,140 before paying tax – double the £12,570 personal tax allowance.
The Treasury has responded to the campaign in a statement, and if it reaches 100,000 signups it will prompt a parliamentary showdown where Treasury representatives would need to present their plans and defend the existing policy.
The petition received an official response recently – soon after Chancellor Rachel Reeves prolonged the threshold freeze until 2031 – which means those receiving the full new State Pension will incur tax obligations from 2027, assuming the triple lock system, ensuring yearly rises of at least 2.5 per cent, remains in place.
The petition, available here, has accumulated 54,304 signatures – triggering an official Treasury statement. Timothy Hugh Mason, who established the campaign, said: “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 Treasury has confirmed that decisions concerning the those only receiving the full new state pension and the £12,570 personal tax allowance will be taken in 2026.
During her Budget speech in November, Ms Reeves pledged that those exclusively receiving the full new state pension would be spared from taxation or the requirement to submit tax returns, though she stopped short of detailing how this measure would work. The Treasury has now revealed it will develop a plan in 2026.
In its official statement, the Government said: “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.”
Addressing the suggestion to raise the minimum tax threshold for pensioners to £25,140, the Treasury remarked: “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.”
The department continued: “The State Pension is the foundation of support available to pensioners. The government is committed to the Triple Lock – one of the most generous State Pension uprating mechanisms in the world – for the duration of this Parliament. This will increase the basic and new State Pension by 4.8% next April, boosting pensioner incomes by up to £575 a year and strengthening retirement security.”
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Officials added: “The Personal Allowance is already the highest amongst G7 countries. Doubling this allowance for all pensioners would be costly and untargeted – disproportionately benefiting higher-income pensioners.”
The triple lock mechanism is set to raise the full new State Pension from £230.25 to £241.30 per week (£12,548 per annum) from next year, placing it just below the threshold.
Personal Finance expert Martin Lewis has pointed out that the complete new State Pension amounts to £12,558 whilst the personal allowance stands at £12,570 until 2031 – the amount individuals can earn annually before incurring tax obligations.
Mr Lewis has observed that the new state pension will fall £30 short of the allowance from April 2026. He explained: “So anyone who’s got any other form of earnings – well, you’re going to go over it if you’ve got the full new state pension, you will have to pay tax.
“But from 2027 because we know the state pension has to rise by a minimum 2.5 per cent because of the triple lock here’s a projection. The minimum it could rise because of the triple lock 2027 it’s going to be about £12,861, £300 more than the tax free allowance as that’s staying stable and it will go more and more and more.”
Projections presented on the Martin Lewis Money Show Live indicate that the smallest potential increases would see new state pensions climb to £12,861 in 2027, £13,183 in 2028, £13,512 in 2029 and £13,850 in 2030. He explained: “So you can see the issue that’s going on. My main concern was the admin. How are we going to have 90-year-olds doing self-assessment forms when they’re only earning £50 over the limit?” Mr Lewis discussed his post-budget exchange with Chancellor Rachel Reeves, during which he raised a query on behalf of a viewer named Rebecca: “Does my 85-year-old father who is living with dementia now have to complete a tax return as his state pension will take him over the personal allowance.”
Ms Reeves responded: “So if you just have a state pension and you don’t have any other pension you don’t have to fill in a tax return. I make that commitment for this Parliament. You’re right 2027 looks like the time it will cross over. We are working on a solution as we speak to ensure we’re not going after tiny amounts of money.”
To view and sign up to the petition click here.