HMRC data shows that millions more people in the UK are paying income tax due to frozen thresholds. In 2023/24, 36.7m people paid tax, marking a year-on-year increase of 2.2m. Of the total, 8.2m are pensioners, a rise of more than 1m. Many retirees are now taxed on pension income, with 7.8m relying on pensions as their main income source. Data shows that higher earners shoulder a disproportionate share of the tax burden and wealthier individuals are also more exposed to taxes on savings interest and dividends. Sarah Coles, head of personal finance at AJ Bell, says higher earners "are firmly in the frame for tax attacks," adding: "The better your income, the worse your tax bill, and the more that frozen tax thresholds will have syphoned from your pay packet."
