Increase the Personal Allowance to £16,000 and link it to inflation

Summary

We call on the Government to increase the Personal Allowance from £12,570 to £16,000 and automatically uprate it each year in line with inflation (CPI), so people on low and middle incomes don’t pay more tax in real terms when living costs rise. The Personal Allowance has remained at £12,570 for several years while prices and wages have increased. This means more of people’s earnings become taxable over time, even when tax rates do not change. We believe that raising the allowance to £16,000 and linking it to inflation would help protect living standards, make taxation fairer, and provide clear, transparent support to working households.

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