Campaigners have branded the freeze on the personal allowance a “scandal” and handed a petition with 275,000 signatures to Downing Street, urging Prime Minister Andy Burnham to raise the tax-free threshold at the Budget next week.
Dennis Reed, director of the over-60s group Silver Voices, called on Mr Burnham to increase the tax-free amount by at least £1,000 to stop pensioners on modest incomes from being dragged into paying tax. He delivered the petition to Number 10 on Tuesday.
Personal allowance frozen since 2021
The personal allowance has been frozen at £12,570 since 2021 and is set to remain at that level until 2031, a move campaigners describe as a stealth tax.
Speaking outside No 10, Mr Reed said: “We're here because we're handing in a big mass petition to get the Government in the Budget next week to raise the lower tax threshold as a major contribution to the cost-of-living crisis.
“It's a real scandal, the fact that the personal allowance has been frozen for the last five years. It's meant that people have lost £3,500, which is a really big hit in your living standards over the last five years.
“The personal allowance would now be over £16,000 if the threshold hadn't been frozen. So, it really is a scandal. It's a sneaky tax. It's an iniquitous tax, and it's a regressive tax because it hits the lower paid most of all.”
Pressure on Prime Minister to act
Mr Reed called on Mr Burnham to follow through on a promise made during the Makerfield by-election campaign, when the Prime Minister said the issue was “lodged in my mind” after hearing it most on the doorstep.
“We want Andy Burnham to actually come forward with his promise. He said he was going to look at the lower tax threshold in his Makerfield by-election,” Mr Reed said.
“He's had a few months now to look at it. So we want to know the answer, Andy. Are you going to raise the lower tax threshold, yes or no? Are you going to do something for the cost-of-living crisis, something meaningful for the cost-of-living crisis, yes or no? We want to know next week in the Budget what you're going to do about the lower tax threshold.”
The full new state pension is set to exceed the personal allowance from next April due to increases under the triple lock, with payments rising by whichever is highest out of average earnings, inflation and 2.5%.
Former chancellor Rachel Reeves confirmed last year that pensioners whose only income is the state pension would not have to pay income tax, but no details have been set out on how this will work.
Protest planned ahead of Budget
Mr Burnham raised hopes he could unfreeze the personal allowance shortly after entering Downing Street in July, but later insisted there was no immediate commitment to increase the tax-free amount, saying it would be looked at in the Budget.
Mr Reed said he was “reasonably hopeful” the Prime Minister will act on the issue. Asked about the chances of Mr Burnham raising the tax threshold, he said: “There is a possibility because he's really laid himself on the line on this one … I'm reasonably hopeful. I hope he does because if not, people will think ‘well, what's it all about? What's the change?'”
The Daily Express will stage a protest on October 28 on Parliament Square in Westminster at 11am ahead of Chancellor John Healey’s maiden Budget. Readers supporting the paper’s campaign to Save Our Pension Triple Lock are invited to join the demonstration, in partnership with Silver Voices.
