An online petition proposes introducing a new tax code for pensioners.

11:03, 08 Oct 2025Updated 11:04, 08 Oct 2025

A new online petition is urging the UK Government to introduce a new tax code specifically for people over State Pension age. Petition creator Timothy Hugh Mason proposes doubling the current Personal Allowance of £12,570 to £25,140 for pensioners only.

The campaigner argues this would give pensioners a “higher tax-exempt limit, but wealthier pensioners would still pay tax” adding “we think that people with small private or workplace pensions are currently being taxed unfairly”.

The ‘Introduce new tax code for State Pensioners with double the personal allowance’ has been posted on the Petitions Parliament website. At 10,000 signatures it would be entitled to a written response from the UK Government, at 100,000 it would be considered by the Petitions Committee for debate in Parliament.

READ MORE: State Pension age set to rise next April for people born in specific yearsREAD MORE: Pensioners urged to check if they will pay tax in retirement next year

The latest HM Revenue and Customs (HMRC) data indicates 8.7 million pensioners are projected to pay income tax on their retirement income for 2025/26. It marks an increase of around 420,000 compared to the previous year (2024/25) and a rise of 1.85m from 10 years ago (2015/16).

The data comes following the freezing of the Personal Allowance thresholds at £12,570 until April 2028, while the full annual New State Pension reached £11,973 in 2025/26, tipping hundreds of thousands more pensioners into paying income tax.

The latest figures from the Department for Work and Pensions (DWP) show there are now 13 million people of State Pension age across the country.

The UK Government has also confirmed it will honour the Triple Lock policy during this parliamentary term. However, this could see everyone on the full, New State Pension pushed over the tax threshold in just two years’ time (2027/28 financial year).

David Brooks, head of policy at leading independent consultancy Broadstone, said: “We would expect a growing number of pensioners to be liable for income tax as the country’s demographic changes due to our ageing population.

“Fiscal drag, however, is also bringing hundreds of thousands more pensioners into paying Income Tax bracket every year as the frozen Personal Allowance thresholds combines with the Triple Lock-protected State Pension.

“While perhaps personally frustrating for many pensioners, it reflects the nature of inflation linked occupational pensions and a Triple-locked State Pension that continues to rise.”

He added: “The government will be called on again to protect pensioners from this impact but with seemingly few ways to control the rise in pensioner incomes, taxation is the only tool left.

“We should also expect the income tax from pensioners to rise in coming years as more income will be taken from pensions. Taking pension income is the key way to protect pension benefits from the impact of the Inheritance Tax Rules on unspent pension funds due to come in from April 2027.”

Under the Triple Lock the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July (4.7%), Consumer Price Index (CPI) inflation rate in the year to September, or 2.5 per cent. Additional State Pension elements and deferred State Pensions rise each year with the September CPI figure.

The CPI figure for August was 3.8 per cent and pension experts now say it looks highly unlikely CPI will be higher than the earnings growth rate.

This means people on the full New State Pension could see payments rise by over £500 next year under the earnings growth. An uplift of 4.7 per cent would increase the full New State Pension to £241.05 per week and £184.75 for those on the maximum Basic State Pension.

It’s important to remember the amount someone receives depends on their National Insurance contributions. To receive the full, new State Pension you need around 35 years’ worth, but this may differ if you were ‘contracted out’.

If September’s inflation figure matches the Bank of England’s projection of 4 per cent, the State Pension would increase by around £500 from April 2026 – lifting it to £12,534 per year.

The projected uprating leaves just £36 before the Personal Allowance income threshold of £12,570 is exceeded which would see more pensioners pay tax in retirement.

State Pension uprating predictions for 2026/27

The CPI for September will be published on October 22 and is forecast to be 4 per cent.

Chancellor Rachel Reeves will confirm the annual uprating at the Autumn Budget on November 26. An uprating of 4.7 per cent on the current State Pension would see people receive the following amounts.

Full New State Pension

  • Weekly: £241.05 (from £230.25)
  • Four-weekly pay period: £964.20
  • Annual amount: £12,534

Full Basic State Pension

  • Weekly: £184.75 (from £176.45)
  • Four-weekly pay period: £739
  • Annual amount: £9,607

State Pension and tax

Guidance on GOV.UK states: “You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates.

Your total income could include:

  • the State Pension you get – Basic or New State Pension
  • Additional State Pension
  • a private pension (workplace or personal) – you can take some of this tax-free
  • earnings from employment or self-employment
  • any taxable benefits you get
  • any other income, such as money from investments, property or savings

Check if you have to pay tax on your pension

Before you can check, you will need to know:

  • if you have a State Pension or a private pension
  • how much State Pension and private pension income you will get this tax year (April 6 to April 5)
  • the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits)

You cannot use this tool if you get:

  • any foreign income
  • Marriage Allowance
  • Blind Person’s Allowance

Use this online tool at GOV.UK to check if you have to pay tax on your pension.

The full guide to tax when you get a pension can be found on GOV.UK here.

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