Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to her Department’s response of 17 November 2025 to the e-petition entitled Raise the income tax personal allowance from £12,570 to £20,000, what assessment her Department has made of the potential impact of raising the income tax threshold to £20,000 on absolute poverty levels.

The Personal Allowance is uprated in line with CPI by default. The previous Government took the decision to maintain the Personal Allowance at its current level from April 2021 until April 2028. The Government is asking everyone to contribute to maintain funding for the NHS and reduce debt, and it is doing this by maintaining the Personal Allowance for a further three years.

As set out in the e-petition response, the Government has no plans to increase the Personal Allowance to £20,000. Increasing the Personal Allowance to £20,000 would come at a significant fiscal cost. This would reduce tax receipts substantially, decreasing funds available for the UK’s hospitals, schools, and other essential public services that we all rely on.

Increasing the Personal Allowance to this level would undermine the work the Government has done to restore fiscal responsibility which is critical to getting our economy growing.

HM Treasury only provides impact assessments on Government policy. The OBR have made an assessment of the Government’s policy related to the Personal Allowance in the Economic and Fiscal Outlook.

The ‘£50 billion’ figure in the e-petition response (https://petition.parliament.uk/petitions/737513) provided an indicative idea of scale only and does not reflect a full costing as this is not Government policy. Data from the 2022-23 Survey of Personal Incomes and the Office for Budget Responsibility (OBR) economic forecast were used to inform this indicative estimate.