Petition to Raise UK Tax-Free Allowance to £20,000 Debated in Parliament Amid Cost of Living Crisis

Petition Calls for Significant Increase in Tax-Free Allowance

A petition gaining substantial traction across the United Kingdom has called for a significant increase in the personal tax-free income allowance, proposing a rise from the current £12,570 to £20,000. Initiated by Alan David Frost, the campaign has amassed over 281,000 signatures, far exceeding the threshold required for a parliamentary debate. The petition's momentum reflects widespread public concern over the ongoing cost of living crisis in the UK.

Arguments for Raising the Allowance

Supporters of the petition argue that increasing the tax-free allowance would provide much-needed financial relief for families and individuals struggling with escalating expenses. The current personal allowance of £12,570 has been frozen since 2021 and is set to remain at this level until April 2028. Advocates highlight several key benefits of the proposed increase:

• Increased Take-Home Pay: Workers could see up to £1,486 more in their annual take-home pay.
• Support for Low and Middle-Income Earners: The change would particularly benefit low and middle-income earners, including parents and part-time workers, who are disproportionately affected by economic pressures.
• Relief for Pensioners: Many pensioners, whose State Pension combined with other small pensions often pushes them over the current tax-free threshold, would benefit from a higher allowance.
• Addressing Fiscal Drag: Freezing tax thresholds during periods of rising wages can lead to 'fiscal drag,' where more income becomes taxable, effectively increasing the tax burden.
• Incentive to Work: For some parents, particularly those facing high childcare costs, a higher tax-free allowance could make returning to work more financially viable.

The petition's proponents emphasize that the measure would help alleviate the burden of rising rent, mortgages, childcare, and utility bills, which are key components of the UK's cost of living crisis.

Government's Stance and Parliamentary Debate

The significant number of signatures led to the petition being debated in Parliament on May 12, 2025. However, the government has maintained that it has 'no plans' to increase the Personal Allowance to £20,000. The official response cites substantial fiscal implications, estimating the cost at 'many billions of pounds per annum' or 'more than £50 billion per annum.'

The government argues that such an increase would significantly reduce tax receipts, thereby impacting funding for essential public services like hospitals and schools, and could undermine efforts to restore fiscal responsibility and economic stability. Furthermore, the government has highlighted that the UK's Personal Allowance has nearly doubled since 2010 and is considered generous by international standards, particularly within the OECD and G7 nations. The decision to freeze income tax thresholds, including the Personal Allowance, until April 2028 was made to support public finances.

Ongoing Cost of Living Challenges

The debate surrounding the tax-free allowance takes place against a backdrop of a persistent cost of living crisis in the UK. This crisis is characterized by essential goods and services, such as energy, food, and housing, increasing at a faster rate than household incomes, leading to a decline in real disposable incomes. While affecting all demographics, the crisis has a disproportionately severe impact on low-income households. The petition and its parliamentary discussion underscore the public's desire for governmental measures to alleviate these financial pressures.