One million more Britons hit by pensioner tax raid despite triple lock protection – Are you one of them?

Joe Sledge
Thu, 30 Apr 2026 07:13:27 +0000

The number of pensioners paying income tax has surged by more than one million in a single year.

HM Revenue & Customs (HMRC) data shows 8.16 million taxpayers aged over 66, rising from 7.14 million the previous year.

This means at least 22 per cent of all taxpayers are now above state pension age.

The increase has been driven by frozen income tax thresholds alongside rising state pension payments under the triple lock.

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As pension incomes increase while the tax-free personal allowance remains unchanged, more retirees are becoming liable for 20 per cent basic rate tax.

A full new state pension currently stands at £12,548 a year, just £22 below the £12,570 personal allowance threshold.

This narrow gap means pensioners receiving even small amounts of additional income, such as from a widow's pension, a private pension or an occupational scheme, are being pulled into paying tax.

The trend is expected to continue as thresholds remain frozen.

Basic and higher rate tax thresholds have been fixed since 2021 and are set to stay at the same level until 2031.

At the same time, the triple lock ensures the state pension rises each year by whichever is highest out of wages, inflation or 2.5 per cent.

This could result in the full state pension exceeding the personal allowance in the coming years, making it taxable on its own.

Dennis Reed said: "Each year the frozen lower income tax band means that more and more older people are being dragged into the tax system."

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"By the end of this parliament the vast majority of retired people in this country will be paying tax — this is a shocking situation.

"Just £20 to £30 extra a month can push you into being taxed and when people are struggling anyway with the cost of living the last thing they need is to be taxed too."

Rachael Griffin said the figures highlight broader changes across the tax system.

She said: "These figures show how frozen tax thresholds are completely reshaping the tax profile of the country."

Ms Griffin said: "Given that we are not expecting to see any changes to thresholds until 2031, these dynamics look set to intensify rather than unwind."

She said the impact is not limited to pensioners but is being felt across the workforce.

Ms Griffin said: "Experienced teachers, senior nurses and police officers are increasingly being pulled into higher-rate tax through incremental pay rises, overtime or progression, rather than genuinely high earnings.

"What was once a marginal issue is now becoming a mainstream experience across large parts of the workforce."

Chancellor Rachel Reeves pledged in November that pensioners relying solely on the state pension would not face taxation.

The mechanism for ensuring this outcome has not been set out.