Savers Urge Chancellor Healey to End Personal Allowance Freeze
UKPulse Money Desk
UK savers are calling on Chancellor John Healey to unfreeze the personal allowance in his upcoming Autumn Budget, as a recent poll indicates nearly 70% of taxpayers support this change.
- The personal allowance has been frozen at £12,570 since April 2021 and is set to remain so until April 2031.
- The amount of tax paid by people in retirement has increased by over 40% in two years, from £21.1bn to £29.8bn.
- From April 2027, pensions will be included in the scope of inheritance tax.
Chancellor John Healey is facing calls from UK savers to end the freeze on the personal allowance in his maiden Autumn Budget. This comes as a recent survey from Pension Bee indicates that nearly 70% of taxpayers desire the unfreezing of the personal allowance.
Critics argue that the current freeze, coupled with frozen thresholds, has led to more workers and pensioners being drawn into higher tax bands. HMRC figures show that the amount of tax paid by retirees has risen by over 40% in two years, from £21.1bn to £29.8bn.
The personal allowance has been fixed at £12,570 since April 2021. While former Chancellor Rachel Reeves initially pledged to end the freeze by April 2028, she later confirmed in the November 2025 Budget that it would continue until April 2031.
In other developments, there are calls to scrap incoming changes to the inheritance tax (IHT) system. From April 2027, pensions will be subject to IHT, meaning unused funds and death benefits will be included in a person's estate for tax purposes.
Why this matters: The continued freeze on the personal allowance and upcoming changes to inheritance tax could impact the financial planning and retirement savings of many UK individuals.
What this means for you: The freeze on the personal allowance may mean that more of your income is subject to tax, potentially drawing you into a higher tax band. Upcoming changes from April 2027 will mean that your pension funds could be included in your estate for inheritance tax purposes.