£450 Cost of Living Payment for June 2025 – Income Tax Personal Allowance has become a major issue of debate for the citizens living in Britain at this time. A petition started by Alan David Frost calls on the Government to increase the Personal Allowance, currently frozen at £12,570, to £20,000. This petition has received the support of more than 2 lakh people by June 2025. As soon as the petition crossed the mark of 100,000 signatures, it was considered eligible for debate in Parliament. Now there is pressure on the British Parliament to consider this as soon as possible.
At present, the personal allowance of income tax is frozen at £12,570. This is the same amount on which income no person has to pay income tax. However, it was frozen from 2021, due to which as people’s salary or wages increased, they gradually came into the tax bracket. This is called fiscal drag in financial language. Due to this, now millions of people have come under the tax bracket who earlier came under tax free income.
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Why is there a need to increase the personal tax allowance to £20,000
Alan David Frost and those supporting this petition believe that in the current situation, it is very important to increase the personal allowance to £20,000. Its biggest benefit will be to those who fall in the low income group. When there will be no tax on the income of low income people, they will have more money in their hands, so that they will be able to meet their daily needs in a better way.
This change will bring relief especially to pensioners. In today’s time, even the income of the elderly receiving state pension is taxed, while it becomes difficult to manage their needs in limited income. If the personal allowance increases, then their entire pension will become tax free or will get tax exemption to a great extent.
Not only on the personal level, the effect of this proposal can also be seen positively on the British economy. When common people have more money left, they will spend it in the market. This will increase business and accelerate economic growth. Also, dependence on government benefits will also decrease because people will have enough resources to run their expenses.
What is the government’s stand and what will happen next
When a petition crosses 10,000 signatures, the government has to give an official response to it. When there are more than 100,000 signatures, a debate in Parliament becomes mandatory. Currently, more than 2 lakh people have signed this petition, due to which it is almost certain that it will be discussed in Parliament.
However, the government’s stance does not seem positive yet. The previous Conservative government had made it clear that there would be no increase in the personal allowance until April 2028. The government argues that if the allowance is increased, there will be a huge loss in tax revenue. It is estimated that this could cause a loss of £40-50 billion to the government every year. This amount is spent on services like education, health and welfare. If this loss occurs, the government will have to compensate for it in some other way, such as by increasing VAT or National Insurance.
What is the current system of personal tax allowance
Currently the income tax personal allowance is £12,570. If your annual income is above £100,000, then your tax free income keeps decreasing. Personal allowance ends completely on income up to £125,140. Another relief for married people is in the form of Marriage Allowance, in which the spouse with a lower income can transfer his allowance up to £1,260. On the other hand, if someone is born before 6 April 1935, then they can also get the benefit of Married Couple’s Allowance.
If the personal allowance becomes £20,000, who will be affected by it?
If this proposal is passed, then the people whose income is currently around the tax limit will get the most benefit. People earning low salaries will become completely tax free, which can lead to a big improvement in their financial condition. This change will be no less than a relief package for pensioners because their entire pension will become tax free. Middle class workers will also save an average of more than £1,400 in tax every year, which will save more money in their pockets.
However, the challenge before the government will be how to compensate for the loss caused by this exemption. The reduction in tax revenue will directly affect public services. Along with this, there is also a concern that when people have more money, the demand in the market will increase, which can also affect inflation.
When is the last date to sign the petition
This petition is still active and will remain open for signatures till 20 June 2025. If you also want to support this change, then you can sign it by visiting the website of gov.uk. What decision will be taken after the debate in Parliament will depend on the economic strategy of the government.
£450 Cost of Living Payment becomes relief for people struggling with inflation
On one hand, the debate about tax allowance is going on, on the other hand, the UK government has already announced £450 Cost of Living Payment. Its purpose is to give relief to those who are being affected by the ever-increasing inflation. This payment has started in May 2025 and its distribution is also going on in June 2025.
There is no need to apply for this payment. If you are eligible, this amount will come directly to your bank account. The payment is being made by DWP or HMRC and it will appear as “DWP COLP” or “HMRC COL Payment” in your bank statement.
This payment is divided into two parts. £301 is being given to those who are taking benefits like Universal Credit or Pension Credit. At the same time, £150 is being given to those who are receiving disability benefits like PIP or DLA. If a person is taking both types of benefits, he will get a total of £450.
People who have not received the payment yet are advised to check their bank statement and contact DWP or HMRC if necessary. The purpose of this payment is to help the needy in times of inflation so that they can easily meet their daily expenses.
At present, this Cost of Living Payment has been announced for 2025. What further support will be available in the future will be decided in the government’s economic situation and the upcoming Autumn Statement.
Conclusion
This petition by Alan David Frost has sparked a new debate about the tax system in Britain. Whether the government will take this petition seriously and give relief to the public or ignore it for fear of revenue loss, only time will tell. On the other hand, the Cost of Living Payment of £450 has come as an immediate relief for the people.
If you want to support the petition, you can sign it by 20 June 2025 and wait for the funds to be credited to your account without any application if you are eligible for Cost of Living Payment.
FAQs On £450 Cost of Living Payment for June 2025
Q. What is the current Personal Allowance in the UK?
A. The current Personal Allowance is £12,570 per year.
Q. Why is there a petition to raise the Personal Allowance to £20,000?
A. To reduce the tax burden on low earners and pensioners, and boost disposable income.
Q. How many people have signed the petition so far?
A. As of June 2025, over 200,000 people have signed it.
