New figures from HM Revenue and Customs (HMRC) indicate that the number of people of State Pension age or over paying income tax has rocketed in recent years. This is due to frozen tax thresholds and successive significant increases to the State Pension.

The data shows that some 6.7 million people of State Pension age or over were paying income tax as of 2021/22. This is projected to have risen to 7.1m in 2022/23, 7.9m in 2023/24 and 8.5m in 2024/25 as more pensioners fall into the income tax bracket.

The latest figures from the Department for Work and Pensions (DWP) suggest there are nearly 12.7m people of State Pension age across the UK. This means 67 per cent of all retirees are forecast to pay tax for the current financial year.

However, financial expert David Brooks, says that it is "wholly appropriate that pensioners on higher incomes are subject to higher levels of tax". He added: "it is confusing why pensioners paying tax is necessarily seen as a bad thing."

The Head of Policy at leading independent consultancy Broadstone, explained: "We would expect a growing number of pensioners to be liable for income tax as the country's demographic changes due to our ageing population and pace of increases to the State Pension.", reports the Daily Record.

"But it is a reminder that with the income tax thresholds frozen at £12,570 until 2028 from 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. It is wholly appropriate that pensioners on higher incomes are subject to higher levels of tax - it is confusing why pensioners paying tax is necessarily seen as a bad thing."

Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants Lane Clark and Peacock (LCP), commented: "These new figures from HMRC are very timely and help to inform the debate about pensioners and tax."

"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 four million since 2010/11. For a pensioner in Britain, being an income tax payer is now the norm rather than the exception."

Recent findings from LCP have highlighted that just under 2.5m retirees in Britain are receiving State Pensions that alone surpass the personal tax allowance, set at £12,570 annually.

Predominantly, these are pensioners within the Old or Basic State Pension scheme, who receive a Basic pension topped up with a substantial earnings-related pension. For the 2024/25 fiscal year, the full New State Pension stands at £11,502, while the full Old or Basic State Pension totals £8,814.

The Tory Party manifesto includes a pledge for a Triple Lock Plus, which guarantees that the Personal Allowance for income tax will increase annually in line with the Triple Lock. The Triple Lock ensures that the New and Basic State Pensions rise each year by the highest of three measures: average annual earnings growth from May to July, Consumer Price Index (CPI) inflation in the year to September, or 2.5 per cent.

Last week, the Resolution Foundation stated that due to changes in benefit policy since 2010, the average pensioner is £900 better off, while non-pensioner households are £1,400 worse off due to a less generous social security system for working-age families. However, the think tank's report noted that tax changes, such as recent cuts to employee National Insurance, have helped balance the 'winners and losers'.

Considering all permanent tax and benefit changes since 2010, the research discovered that pensioner households are on average £1,000 a year better off in 2024/25, while working-age households are £760 a year better off.