New figures published today by HMRC show that far more pensioners are now paying income tax than previously thought, and that the numbers paying tax have reached record levels. The number of over 65s paying tax has risen by more than 3 million in the five years since the tax threshold was frozen and has broken through the 10 million mark for the first time.
Each year the figures show how many people are paying tax in total, how many are paying tax at different marginal rates, how many pensioners pay tax and so on. But in the small print of this year’s Spring Statement (see notes to editors) it was suggested that previously published figures may have under-estimated the number of taxpaying pensioners. This is confirmed in today’s publication.
The tables below shows figures for two groups:
- Those aged 65 or over
- Those above state pension age – note that pension age started rising from 66 in April 2026, so the size of this group grows more slowly than normal this year
The table shows the originally published figures and the latest figures from HMRC, including new estimates for 2026/27. For comparison, it also shows the numbers each year since the tax allowance was frozen at £12,570 in 2021/22
- People aged 65 or over – number of taxpayers (‘000s)
| Previous publication | Today’s estimate | |
| 2021/22 | 7,100 | 7,100 |
| 2022/23 | 7,510 | 7,510 |
| 2023/24 | 8,250 | 8,580 |
| 2024/25 | 8,740 | 9,240 |
| 2025/26 | 9,190 | 9,570 |
| 2026/27 | n/a | 10,200 |
- People aged over state pension age – number of taxpayers (‘000s)
| Previous publication | Today’s estimate | |
| 2021/22 | 6,740 | 6,740 |
| 2022/23 | 7,130 | 7,130 |
| 2023/24 | 7,830 | 8,160 |
| 2024/25 | 8,300 | 8,780 |
| 2025/26 | 8,720 | 9,080 |
| 2026/27 | n/a | 9,580 |
A combination of a frozen tax-free allowance and significant year-on-year rises in the state pension (and other sources of taxable income), alongside a rise in the size of the pensioner population, means that the number of taxpaying over 65s has risen dramatically in recent years – up over 3 million since the tax allowance was set at £12,570 in 2021/22
In April 2027, for the first time, the standard rate of the new state pension will exceed the tax-free threshold, meaning that those wholly dependent on the new state pension would become taxpayers. In the 2025 Autumn Budget the Chancellor announced that a special scheme would be put in place to prevent such people having to pay tax, but there are still no details as to how this will work.
With DWP figures suggesting that around 12.2m people in the UK are receiving a state pension, the latest HMRC figures indicate that more than 7 in 10 pensioners is now a taxpayer.
“The surge in older people paying income tax is continuing, with record numbers of taxpaying pensioners in 2026/27. The recent extension of the freeze in personal allowances, combined with the continued generous indexation of the state pension means that even more people in retirement can expect to become taxpayers for the first time in the coming years”.
Steve Webb, partner at pension consultants LCP
