HMRC has responded to calls to increase everyone's personal allowance from £12,750 to £20,000, following a petition signed by more than 60,000 people.
The petition, titled Raise the income tax personal allowance from £12,570 to £20,000, was started by Shannon Keene, who said: "This would help with increasing rent, mortgages, Council tax, and Gas and Electric bills. Some families can’t afford to go back to work after children due to childcare costs wiping their whole income.
"We think that we are currently paying ridiculous amounts of tax, and that minimum wage isn't even enough to support an average family.
"We believe that this would lead to a massive increase on people willing to look for work, instead of people not wanting to, due to it being too expensive to now live."
The full petition is here .
HMRC responded to this, saying: "The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility, so we will not increase the Personal Allowance to £20,000.
"The Government is committed to keeping taxes for working people as low as possible while investing in public services and not taking risks with the economy.
"The Government currently has no plans to increase the Personal Allowance to £20,000. Increasing the Personal Allowance to £20,000 would come at a significant fiscal cost of more than £50 billion per annum.
"This would reduce tax receipts substantially, decreasing funds available for the UK’s hospitals, schools, and other essential public services that we all rely on. A £50 billion cut in public services is equivalent to slashing roughly a quarter of the NHS Budget, or around 80% of defence spending."
HMRC statement after calls to double Personal Allowance for pensioners hits 45,000 https://t.co/3y3BOvPRgm
— Chester Standard (@standardchester) January 14, 2026
The statement added: "To support the lowest paid workers in our economy, the Government asked the Low Pay Commission to account for the cost of living when making their recommendations on the minimum wage rates to apply from April 2025, for the first time.
"The government is also supporting families through the universal offer of 15 hours of government-funded childcare for all parents of 3- and 4-year-olds and eligible working parents of children aged 9 months and above can access 30 hours a week in free childcare."
How will HMRC personal allowance change for pensioners?
In the autumn budget, Chancellor Rachel Reeves hinted that one group of people - pensioners - might get a bigger personal allowance.
She said at the start of the budget 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."
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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.
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