Petition urges tax-free allowance for older people

A petition led by Silver Voices has gathered over 100,000 signatures. It calls on the Chancellor to reinstate the tax-free personal allowance for older people. Many older individuals are already paying taxes because of private pensions and savings. When these pensioners receive their state pension, it is taxed alongside their other income. This means that any increase from the Triple Lock is taxed, effectively reducing the amount they receive by 20%. Though the state pension is considered a “benefit,” it is funded through years of tax and national insurance payments. Most benefits are not taxed, which raises questions about why pensions are. The ideal solution would be to exempt state pension income from taxes. However, that is not currently the case. Since 2021, the tax-free threshold has been frozen, putting more pensioners into the tax system. In the last financial year alone, 660,000 more pensioners became liable for tax. Even those with small pensions are now affected. Starting in 2026, individuals with only the new state pension might also face taxation on that income. The Department for Work and Pensions (DWP) does not deduct taxes from the state pension before it is paid. This means pensioners often have to repay taxes later, which can be challenging. The Government may not fully grasp the difficulties this creates. The Conservatives proposed a solution during the General Election. They suggested a “Triple Lock Plus” that would raise the personal allowance for pensioners each year. Silver Voices asked Labour to support this idea, but the request was ignored. Now, Labour faces a choice. They could simply add £1,000 to the personal tax allowance for pensioners and adjust it annually according to the Triple Lock. This would effectively resolve the issue for many older people.