HMRC has responded to a petition calling for a higher tax-free allowance for state pensioners, signed by more than 45,000 people. The proposal urged the government to introduce a new tax code that would double the Personal Allowance for pensioners, arguing that those with small private or workplace pensions are being taxed unfairly. The government rejected the idea, stating that while it is committed to a fair tax system, doubling the allowance would be costly and poorly targeted.
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In its response, HMRC stressed that the State Pension remains the foundation of financial support for pensioners. It acknowledged concerns about tax complexity but said a blanket increase in the Personal Allowance would not be an effective solution. The petition remains open for signatures until April 2026, though the government has made clear it does not plan to adopt the proposal.
However, ministers did outline a change aimed at easing the burden on some pensioners. From the 2027–28 tax year, those whose only income is the basic or new State Pension will no longer be required to pay small amounts of tax through the Simple Assessment system, even if the pension exceeds the Personal Allowance. The government said it is working on the technical details and will provide further clarification next year.
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Currently, the standard Personal Allowance stands at £12,570 and has been frozen since 2021. Analysts have warned that continued rises in the State Pension, combined with the frozen threshold, will push more pensioners into paying income tax. The government has sought to reassure pensioners that it will avoid pursuing small tax liabilities, but it has ruled out any broad increase to the allowance itself.
