More than 140,000 pensioners are set to receive tax demands for the first time since they retired due to the freezing of tax thresholds. The number of pensioners paying the highest rate of tax has almost doubled in just a year, with over 100,000 taxpayers over the age of 65 now paying 45p in the pound on the top chunk of their income. This increase is due to a series of tax manoeuvres introduced by the Conservative government and adopted by Labour. These include a cut in the point at which the 45p tax rate kicks in and a freeze on the thresholds at which higher rates of tax apply. Economists suggest that this freeze will result in an extra tax burden of over £120bn across the population. Sustained freezes on income tax bands are expected to push an additional 3m workers into the 40% tax bracket in the next five years.
