{"id":120701,"date":"2025-05-21T20:29:08","date_gmt":"2025-05-21T20:29:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/120701\/"},"modified":"2025-05-21T20:29:08","modified_gmt":"2025-05-21T20:29:08","slug":"pensioners-born-before-this-date-dealt-huge-tax-blow-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/120701\/","title":{"rendered":"Pensioners born before this date dealt huge tax blow | Personal Finance | Finance"},"content":{"rendered":"

For Brits aged 66 or over, taxes<\/a> have crept up over the past four years. The number of pensioners born in or before 1959 who are paying 40 or 45% has doubled since 2021 thanks to a freeze on tax thresholds<\/a>, according to reports. This means more than a million pensioners are now paying higher rates of tax compared to four years ago.<\/p>\n

Around 904,000 people at state pension<\/a> age, which is presently 66, pay the 40p rate, while 124,000 lie in the 45p band, according to data obtained under a freedom of information request by LCP, a pensions consultancy. In 2021-22, the numbers were 455,000 and 39,000, The Times reports<\/a><\/p>\n

The change is a clear example of the impact the freeze on income tax thresholds<\/a> had.<\/p>\n

This was introduced by Rishi Sunak<\/a> when he was chancellor in 2021, the Labour government has extended it until April 2028.<\/p>\n

When considering the impact it has had, this change has allowed more people to be dragged into paying higher taxes<\/a> as their incomes rise and is commonly referred to as a \u201cstealth tax<\/a>\u201d.<\/p>\n

The number of pensioners paying the basic rate of income tax<\/a> is also up, from 6.25 million in 2021-22 to 7.79 million this year.<\/p>\n

Speaking to The Times, Sir Steve Webb, a partner at LCP and a former pensions minister, said: \u201cThe higher rate threshold has become a real cliff-edge over which growing numbers of pensioners are falling.<\/p>\n

\u201cThere has been a significant increase in the number of pensioners paying income tax at all rates, but the rise has been greatest in the numbers paying income tax at the higher rates.\u201d<\/p>\n

The number of pensioners paying higher rates of tax<\/a> is set to increase further as personal allowances and tax thresholds are set to be frozen until the start of the 2028-29 tax year.<\/p>\n

But, the rate of increase is likely to be slower because the state pension<\/a> age will rise from 66 in April 2026 to 67 by April 2028.<\/p>\n

A Treasury spokesman said: \u201cWe are committed to helping our pensioners live their lives with dignity and respect, which is why we have frozen fuel duty<\/a> and increased the state pension<\/a>.<\/p>\n

\u201cOur commitment to the triple lock<\/a> means millions will see their state pension<\/a> rise by up to \u00a31,900 this parliament.\u201d<\/p>\n

Stealth taxes<\/a> begin to apply to an individual without clear warning and with this tax, many Brits may not have noticed they are paying more.
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