NINE MILLION STATE PENSIONERS FACE BEING SLAPPED WITH 'INCOME TAX BILL'

Nearly 9 million people above 65 are paying income tax, experts have warned. Tax expert Andy Wood highlights the significant impact frozen tax thresholds have on individuals and pensioners, revealing a staggering increase in the number of taxpayers.

Tax Natives expert Andy said: "The number of pensioners paying income tax has seen a concerning increase. In the 2023/24 tax year, 8.27 million people aged 65 and older paid income tax. This number is expected to rise to 8.95 million in 2024/25, a significant jump from the 4.9 million in 2010/11, highlighting a major shift in the tax burden on older citizens."

He added: "Frozen tax thresholds, coupled with significant state pension increases, mean that for many pensioners, paying income tax has become the norm rather than the exception. This long-term trend highlights the ongoing impact of fiscal policies on the older population."

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He went on: "The pandemic and cost-of-living crisis have fueled wage growth, but tax thresholds have barely adjusted. The higher rate tax threshold has only moved by £270 since 2021/22, which is insufficient given the economic changes we've experienced.

"By not adjusting the income tax brackets during times of high inflation and wage growth, more people are ending up paying taxes. In the tax year 2024/25, it's expected that about 29.5 million people will pay the standard tax rate, an increase from 28.8 million the year before.

“In addition to this, 310,000 more people will move into the higher tax bracket, making a total of 6.31 million people paying at this higher rate." He continued: "One significant change is that the number of people paying the highest tax rate will exceed one million for the first time. About 1.1 million people are expected to pay this additional tax rate this year, up from 950,000 last year. This increase is largely because of the lowered income threshold for this tax rate to £125,140 in April 2023.

“The decision to freeze tax thresholds since the 2021/22 tax year has seriously impacted taxpayers. With the personal allowance frozen at £12,570, an additional 4.4 million people are now paying income tax. Moreover, nearly 2 million more people are expected to enter the 40% tax bracket this year.

2024-07-10T09:10:37Z dg43tfdfdgfd