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 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.”

Broadstone head of policy, David Brooks, also highlighted the latest update as a reminder that with the income tax thresholds frozen at £12,500 until 2028 since 2021, an "ever-growing proportion of pensioners will be captured by the tax given the increases to the state pension".

“For most people the state pension will be below the personal allowance, and it is only extra private savings that exceed this limit," he added.

The data has also sparked calls for broader tax reform, as Quilter tax and financial planning expert, Rachael Griffin, said that the figures "paint a picture of a tax system in need of re-evaluation".

"As income tax thresholds remain frozen amidst higher wages and inflation only just returning to the Bank of England’s 2 per cent target, the government's original policy intentions will be far surpassed, piling pressure on taxpayers," Griffin stated.

"Though nominal salaries have increased, the purchasing power of these wages have remained stagnant or even decreased for some, and an increasing number of individuals are subjected to higher tax rates and in some circumstances a loss of benefits.

“Crucially, neither of the main political parties has pledged to thaw the frozen tax thresholds. The next administration faces a critical decision of whether to recalibrate tax thresholds or risk perpetuating a system that risks stifling economic growth and unfairly targeting those struggling to keep up with living costs."

---