8.5m folks aged 65 and over are earnings tax payers

Some 8.5 million folks aged 65 and over are earnings tax payers – a rise of round 10% in contrast with a 12 months earlier – in line with HM Income & Customs (HMRC) figures.

In 2022/23, simply over 7.7 million folks aged 65 and over have been earnings tax payers.

In 2004/05, just below 4.3 million folks aged 65 and over have been earnings tax payers.

The entire variety of taxpayers of all ages elevated by 1.3 million yearly to succeed in 35.9 million in 2023/24.

Sir Steve Webb, a former Liberal Democrat pensions minister who’s now a associate at consultants LCP (Lane Clark & Peacock), advised the numerous improve within the variety of older folks paying tax may have been pushed by the bumper (10.1%) improve within the state pension in April 2023, in addition to inflation-linked will increase to different pensions.

He mentioned: “A mixture of excessive inflation and frozen tax allowances signifies that nicely over eight million folks aged 65 or over are actually paying tax, a doubling within the final 20 years.

“The variety of pensioners paying tax will proceed to extend quickly in years to come back, significantly if inflation stays comparatively excessive and thresholds proceed to be frozen.”

Beneath the pensions “triple lock”, the state pension usually rises annually in keeping with wages, inflation or 2.5% – whichever is greater.

It has been advised that stubbornly excessive inflation could pave the best way for older folks receiving one other bumper state pension improve subsequent 12 months.

Alice Man, head of pensions and financial savings at interactive investor, mentioned: “The stark figures display the chilling effectiveness of freezing tax thresholds.”