A record 10.2 million people aged 65 and over are expected to pay UK income tax during the 2026/27 tax year as frozen thresholds pull more pensioners into the tax system, according to new figures from HM Revenue & Customs (HMRC).
The projections show the number of older taxpayers has risen sharply despite no increase in income tax rates. Instead, a prolonged freeze in the Personal Allowance and higher-rate thresholds has meant rising State Pension payments and other retirement income are increasingly becoming taxable, a phenomenon widely known as fiscal drag.
