The number of pensioners paying a punishing 60 per cent income tax rate has more than doubled in just three years, as frozen tax thresholds drag tens of thousands more older savers into higher tax bands.
New figures from HM Revenue & Customs show that around 77,000 people aged 66 and over fell into the “60 per cent tax trap” in the last tax year — up from 38,000 in 2021–22.
The steep rate applies to anyone earning between £100,000 and £125,140 a year. Within this band, individuals lose 60p of every extra £1 earned because the personal tax-free allowance of £12,570 tapers away once income exceeds £100,000.
The threshold has been frozen since 2010, and if it had kept pace with inflation, it would now stand at about £155,000. Analysts say this freeze — along with the broader “fiscal drag” caused by static tax bands — has pushed growing numbers of workers and retirees into punitive tax brackets.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.
