The standard rate of personal allowance is £12,570, although some people can have higher amounts, and some higher-earners lower, depending on what they take home and how much they put into their pension.
It decreases if your income is over £100,000. For every £2 you earn over £100,000, you lose £1 of your tax-free Personal Allowance.
When will the HMRC Personal Allowance increase?
The last Government froze the threshold back in 2021, saying it would remain until April 2028, rather than allowing it to rise with inflation and wage growth, meaning more people will go onto higher tax brackets.
If you’re married or in a civil partnership, you may be able to claim Marriage Allowance to reduce your partner’s tax if your income is less than the standard Personal Allowance.
If you do not claim Marriage Allowance and you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance.
When does the personal allowance renew?
It will next renew on April 6 2027, which is the start of the new UK HMRC tax year, for 2027 to 2028.
It’s a big date for new allowances – it’s when your pension, personal allowance, an ISA or self-employed financial allowances all renew.
There’s more details about the new tax year and your allowances in this guide.
Petitions to raise the HMRC income tax personal allowance threshold
More than 120,000 people signed a Parliamentary petition calling for the personal allowance for state pensioners to rise to £25,140, forcing ministers to respond in Westminster Hall earlier this month – the second time they have debated this in a year.
Campaigners argue that the annual increases to the state pension under the triple lock are being undermined because the HMRC personal allowance has remained frozen, dragging more people into paying income tax despite relying on modest retirement incomes.
Opening the debate, prompted by the petition, Conservative MP John Lamont said increasing numbers of pensioners were being caught by frozen tax thresholds.
He highlighted the case of petitioner Tim Mason, who said he receives a small Royal Mail pension alongside his state pension and believes many retirees are now paying tax on pensions they spent decades saving for.
Why the HMRC personal allowance is becoming a bigger issue
The HMRC personal allowance currently stands at £12,570.
Meanwhile, the full new state pension has risen to around £12,547.60 a year, leaving a gap of just over £20 before retirees begin paying income tax if they receive any additional pension income.
That means even relatively small workplace or private pensions can push retirees above the tax-free threshold.
During the debate, Conservative MP Alison Griffiths said many pensioners feel frustrated because they see their pension increase each year only for more of it to be taxed.
She said: “They are asking a simple question: why are more and more pensioners being drawn into paying tax?”
She argued that the issue was not that pensioners had become wealthier, but that frozen tax thresholds meant “the tax system reaches further into people’s incomes each year.”
Calls for an HMRC personal allowance increase
The petition asks ministers to introduce a separate, higher personal allowance for state pensioners.
Supporters argue this would ensure retirees are not paying tax on income that many see as intended to provide a basic standard of living in retirement.
During the debate, Conservative MPs pointed to the party’s previous proposal for a “Triple Lock Plus”, which would have increased the tax-free allowance alongside rises in the state pension.
Government rejects higher HMRC personal allowance
Pensions Minister Torsten Bell acknowledged the strength of feeling behind the petition but ruled out introducing a higher tax-free allowance for pensioners.
He said no political party was proposing to double the personal allowance because it would cost the Treasury billions of pounds each year.
Bell told MPs: “The reality is that no political party will deliver a doubling of the personal allowance for pensioners.”
Instead, he said the Government’s priorities remained protecting the state pension through the triple lock and reducing NHS waiting lists.
However, he confirmed that ministers still plan to stop pensioners with only small amounts of tax to pay having to deal with HMRC’s simple assessment process from 2027, with legislation expected in the next Finance Bill.
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Why pensioners are worried
Although the state pension continues to rise each year under the triple lock, frozen tax thresholds mean more retirees are expected to become taxpayers over time.
Many campaigners argue that without an increase in the HMRC personal allowance, future state pension rises will increasingly be offset by income tax, reducing the value of annual increases.
While ministers rejected the petition’s proposal, the Westminster Hall debate demonstrates growing political pressure over whether the HMRC personal allowance should rise as more pensioners begin paying tax on their retirement income.