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There has been an increase in the number of people over state pension age paying income tax, rising by 660,000 from 7.85 million in 2023/24 to 8.51 million in 2024/25, HM Revenue and Customs (HMRC) data has found.
This increase is part of a broader trend seen since the state pension age rose to 66 in 2020/21, when 6.47 million pensioners were paying tax.
Furthermore, when considering all those aged 65 or over, HMRC's latest data showed that there are now just under 9 million taxpayers (8.95 million) aged 65 or over, compared with 4.9 million in 2010/11 on the same definition, an increase of around 4 million.
The conservative triple lock plus policy aims to prevent pensioners from ever paying tax on their state pension by increasing their personal allowance every year, with the Conservative Party’s website stating the triple lock plus would ensure that pensioners would “never pay tax on their state pension”.
However, recent analysis by consultancy LCP found just under 2.5 million pensioners would still pay tax on their state pension even after the implementation of a ‘triple lock plus’ policy.
The large majority of these taxpayers are older pensioners on the ‘old’ state pension system, which combines a basic pension with a significant earnings-related pension under the state earnings related pension scheme.
Given this backdrop, LCP partner Steve Webb said that the new figures from HMRC are "very timely and help to inform the debate about pensioners and tax".
He continued: “They show that a combination of frozen tax thresholds and significant increases in the state pension means the number of pensioners paying tax has continued to soar.
“But this is a continuation of a long-term trend which has seen the number of over-65s paying tax rise by around 4 million since 2010/11.
“For a pensioner in Britain, being an income taxpayer is now the norm rather than the exception.”
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