Millions of pensioners are on course to hand over nearly £3,000 more in tax thanks to frozen income tax thresholds, with experts warning it’s a “stealth raid” that many never saw coming.
Despite a promise to boost schools and the NHS, Labour Chancellor Rachel Reeves has stuck to the Conservatives’ controversial plan to freeze tax thresholds until 2028. That means the personal allowance will remain at £12,570 — the same level set back in 2021. If it had risen in line with inflation, it would be closer to £16,290 by 2027-28, reported Lancs Live.
That gap means pensioners could end up paying far more, even if their income hasn’t changed much. New analysis shows someone earning £30,000 in retirement will pay around £2,960 extra over the six-year freeze compared to what they would’ve paid under inflation-linked allowances.
Finance expert Jon Greer from Quilter said it’s hitting older Brits hard. “Pensioners are being quietly dragged into the tax net thanks to years of frozen thresholds and rising income,” he explained. “What might once have been seen as a modest retirement income is now being taxed more heavily each year.”
He added: “For those on fixed incomes, the pressure is very real. It’s a stealth raid, plain and simple.”
And it’s not just about the extra tax — the number of pensioners affected is growing fast. New HMRC data shows that by 2028, 8.2 million over-60s will be paying basic rate tax, with 12 million more in the 40p band and another 2 million in the top 45p bracket.
Even the state pension is creeping up on the tax threshold. After an 8.5% rise this month, the full pension now sits at £11,973 — just £597 shy of being taxed. And with the triple lock still in place, experts say it’ll likely cross that line within three years, meaning even those relying solely on state pensions could be taxed for the first time.
Before April, 249,000 people were already paying £1,000 or more in tax on their pensions, and over 10,000 were being hit with bills over £2,000. Most pensioners also have some form of private pension, which pushes them into higher tax brackets without realising it.
In response, the Treasury said it’s helping pensioners with frozen fuel duty and higher state pensions. “Our commitment to the triple lock means millions will see their pension rise by up to £1,900 this parliament,” a spokesperson said.
Don’t Miss These:
- Nigel Farage Slammed for Offering Zero Help to Struggling Scottish Families
- Keir Starmer Slams Divisive Politics and Reclaims England’s Flag in Emotional St George’s Day Speech
- Tamara Ecclestone Loses £25 Million After Massive Insurance Mistake
- Tory Meltdown Alert as Voters Flee Before Local Polls
- Piers Morgan Slams Keir Starmer Over U-Turn on Defining a Woman After Supreme Court Ruling
