Chancellor John Healey is being urged to raise the lowest income tax threshold (Image: Getty)
People have just 6 days to pressure the Andy Burnham government over frozen tax thresholds. In the budget last month Chancellor John Healey did not make a change despite calls.
People only have until Saturday November 14 to sign up – and if it reaches 10,000 signatures then the Treasury will be forced to respond and lay out its position and any possible change update.
The thresholds where people pay income tax have been frozen since 2021 and, under current plans, that will remain the case until 2031.
This means some of the lowest-paid workers are being made to pay more and more tax in what is known as ‘fiscal drag’. The basic Personal Allowance in the UK is £12,570 for the 2026/27 tax year. This is the amount you can earn annually before you begin paying 20 per cent income tax.
The higher 40% rate kicks in at £50,271 and the additional 45% rate at £125,140. Independent data suggests a basic-rate earner (£20k–£50k) pays roughly £700 to £800 more tax per year purely due to the freeze.
The Petition, created by Wade Reid says: “The personal allowance has been frozen while living costs have risen, meaning workers pay more tax in real terms. Increasing it to £20,000 would put more money into millions of workers’ pockets, helping with rising bills and supporting low and middle earners.
“The personal allowance has been frozen since 2021 while living costs have risen sharply, meaning workers are paying more tax in real terms. As wages increase slightly to keep up with inflation, more people are pulled into paying tax or higher rates. Increasing the threshold to £20,000 would put more money into millions of workers’ pockets, ease financial pressure, and support low and middle earners during a cost of living crisis.”
Mr Healey did not make any changes to the allowances in the Budget – but he did tell ITV viewers there were potential ‘bigger changes’ on the way. On his ITV show, personal finance guru Martin Lewis read out a question from viewer Michael: “Will the Chancellor be honest and admit he’s raising taxes on working people by stealth by continuing the freeze on tax thresholds? He is being totally disingenuous.”
Martin asked: “When will you raise tax thresholds?” Mr Healey said: “Well, our promise was not to raise rates across the board and this was a budget unlike in some previous years where I rejected the idea of broad-based tax rises because it isn’t just businesses, it’s individuals and households that are under pressure.
“So where I could avoid that, I decided I should do that. And it was a budget, if you step back, that was designed to take action where we could just to help take a bit of pressure off people, give people a bit of breathing space, which we’ve done, especially on energy. And it was a budget also designed to try and do that a bit for business.”
“So where I could avoid that, I decided I should do that. If you step back, that was designed to take action where we could just to help take a bit of pressure off people, give people a bit of breathing space, which we’ve done, especially on energy. And it was a budget also designed to try and do that a bit for business.”
But Martin took issue on the working people taxes – and said fiscal drag was doing exactly that: “Forgive me, this specific question. You said in the speech yesterday, we are not raising taxes on working people. Well, by all definitions, the fiscal drag, the freezing of the tax thresholds is the biggest tax that has ever been raised in recent history. You accept you are while you’re not raising tax rates, you are increasing taxes.”
Mr Healey said: “In truth, it is part of any government’s revenue and judgments about thresholds as well as rates are part of the judgments that have to be taken, and the plans for the thresholds have been set for the next few years. And I took the decision in this budget that I wouldn’t touch those and I would do what I can where I could to help people. And then make some bigger changes for the long term. Because fundamentally we’ve got parts of our system that needs fixing.”
Fiscal drag occurs when the government freezes tax thresholds while inflation and nominal wages rise. Instead of explicitly raising tax rates, the Treasury captures more revenue because a larger share of worker incomes crosses the frozen boundaries.
According to the most recent HMRC data, there are 31.4 million basic-rate taxpayers across the country. That represents a 15% rise in the number of people paying income tax at 20% since tax bands were frozen at 2021 levels.
A total of 7.7 million individuals are anticipated to pay the higher rate this year – an increase of a million compared to two years ago. An additional 1.3 million people are projected to pay the 45% additional rate – substantially more than the 263,000 people paying it in 2010-11 when it was initially introduced.
Had the threshold increased in line with inflation, it would stand at approximately £16,072 next year and £17,380 by 2029-30, according to analysis by AJ Bell. Should Burnham choose to raise the personal allowance to £16,000, it would cost around £35bn, the investment platform stated.
Increasing the allowance by merely £100 would cost roughly £1bn annually. To view and back the petition, click here.
Raise HMRC Personal Income Tax Allowance from £12,570 to £20,000 – Six Days Left to Act
Millions of British taxpayers are being urged to support a campaign calling for a major increase in the personal income tax allowance, as pressure grows on the government to ease the financial burden facing ordinary households.
The campaign is demanding that the current tax-free personal allowance, set at £12,570, should be increased to £20,000. Supporters argue that workers should be allowed to keep more of their hard-earned money, particularly after years of rising living costs, higher household bills and increasing financial pressure.
With just six days remaining before the petition deadline of November 14, 2026, campaigners are encouraging members of the public to make their voices heard.
Why Is the £20,000 Tax Allowance Campaign Important?
The personal allowance is the amount an individual can earn each year before paying income tax.
Currently, most people in the UK can earn £12,570 without paying income tax. Any income above that amount is generally subject to taxation, depending on the applicable tax bands and individual circumstances.
Campaigners want this threshold increased to £20,000, meaning workers could earn an additional £7,430 before income tax becomes payable.
For people on lower and middle incomes, such a change could make a meaningful difference to household finances.
The campaign argues that wages have increased over recent years partly because of inflation, but the tax-free allowance has remained unchanged. Consequently, more people are paying income tax, while existing taxpayers are seeing a greater proportion of their earnings fall within taxable income bands.
Six Days Left to Support the Petition
The petition has attracted attention because of its approaching deadline.
Campaigners are urging people who support the proposal to sign the official parliamentary petition before Saturday, November 14.
The petition is seeking to reach the required 10,000 signatures, which would trigger a formal government response under Parliament’s petition rules.
It is important to understand that reaching 10,000 signatures does not automatically force the government to increase the allowance. It requires the government to respond to the petition.
Nevertheless, supporters believe that reaching the threshold would keep the issue in the political spotlight and demonstrate public concern about income taxation.
Why Are Taxpayers Frustrated?
One of the biggest concerns is the prolonged freezing of income tax thresholds.
The personal allowance has remained at £12,570 since April 2021. Under current government plans, it is due to remain at this level until April 2031.
This has contributed to what economists call fiscal drag.
Fiscal drag occurs when wages rise but tax thresholds remain unchanged. As a result, people can end up paying more income tax even when their purchasing power has not improved significantly.
For households already struggling with food prices, rent, mortgages and energy bills, this can create additional financial pressure.
How Much Could Workers Save?
Increasing the personal allowance from £12,570 to £20,000 would mean an additional £7,430 of income becoming tax-free.
For an individual paying the standard 20 per cent income tax rate on that additional amount, the potential annual tax saving would be £1,486.
That is approximately £124 per month.
However, the actual benefit would depend on individual circumstances, other income and the interaction with existing tax bands.
The proposal could also have significant consequences for public finances because the government would collect less income tax.
What Has the Government Said?
The government has previously indicated that it has no plans to increase the personal allowance to £20,000.
Its position is that maintaining tax thresholds helps provide funding for public services, including the NHS, while supporting the government’s wider fiscal objectives.
However, campaigners argue that the current system places too much pressure on working people and that a higher tax-free allowance would help households retain more of their earnings.
Why Public Support Matters
The campaign highlights a wider question about taxation and fairness in Britain.
Workers want to feel that earning more money will improve their financial security rather than simply push more of their income into taxation.
Pensioners and people on modest incomes are also concerned about the impact of frozen thresholds on their ability to manage everyday expenses.
Whether the government ultimately accepts the proposal remains uncertain, but the approaching petition deadline provides an opportunity for supporters to demonstrate the level of public interest.
Conclusion
The campaign to increase the personal income tax allowance from £12,570 to £20,000 has become an important discussion about household finances and the future of taxation in Britain.
With six days remaining before the November 14 deadline, supporters are calling on taxpayers to sign the petition and encourage Parliament to examine the proposal.
The government faces a difficult balance between protecting public finances and ensuring that working people can keep a reasonable share of their earnings.
For millions of households, the central question is simple: should people be allowed to earn more before the government takes a share through income tax?
The petition may not guarantee a change in policy, but it provides an opportunity for the public to make its position known.