The number of pensioners paying income tax rose more than a million in a year, with at least 22 per cent of taxpayers now being over state pension age.
HM Revenue & Customs figures published in April 2026 for the 2023-24 tax year show that there were 8.16 million taxpayers aged over 66, up from 7.14 million in the year before. The jump came as rises in the state pension and a freeze on income tax thresholds pushed more older people into paying 20 per cent basic rate tax on their retirement income.
The number of people of all ages paying 45 per cent additional-rate tax soared 57 per cent from 569,000 in 2022-23 to 893,000 in 2023-24. This was largely down to the fact that the additional-rate threshold was cut from £150,000 to £125,140 in April 2023.
Dennis Reed from the pension campaign group Silver Voices said: “These figures are no surprise. Each year the frozen lower income tax band means that more and more older people are being dragged into the tax system.
“By the end of this parliament the vast majority of retired people in this country will be paying tax — this is a shocking situation. Most retired people aren’t earning income from work so what is being taxed is the state pension and any additions to the state pension such as a widows’ pension or a small private or occupational pension.”
The Civil Service Pensioners’ Alliance (CSPA) has also strongly raised concerns about the impact of frozen tax thresholds on pensioners, warning that continued inaction is pulling increasing numbers of older people into tax on what are often modest retirement incomes.
General Secretary Sally Tsoukaris said: “These figures underline what we have been warning for some time. Frozen tax thresholds are having a direct and growing impact on pensioners, many of whom rely on fixed and modest incomes.
“The CSPA is actively campaigning for the Government to unfreeze tax thresholds as a matter of urgency. It is not acceptable that people who have spent a lifetime contributing to public service are now being pulled further into the tax system simply because thresholds have not kept pace with inflation. Fairness in retirement income must be restored.”
