More older Brits pay tax on pensions under Tories as Sunak's Labour claim backfires

The number of pensioners paying tax on their retirement savings has actually risen under the Tories, official figures have revealed today. Amid the election debate around pensioners and tax, HMRC has today published its annual update of the number of pensioners paying income tax. The data revealed that there are 8.

51million older Brits paying income tax on their pensions in 2024/25, which is up 660,000 from the 7.85million last year. In 2020/21 - when the pension age rose to 66 years - there were 6.



47million old Brits paying tax on their pensions. This means in the last three years 2million more pensioners were dragged into paying tax on the income they received from both the state and private pensions. The figures emerged as the Tory party promised that no retirees would pay tax on their state pension, under a policy of the “triple lock plus“.

Under the plans, the tax-free allowance for pensioners would rise in line with the existing triple lock. This would mean both the state pension and retirees’ tax-free allowance – currently £12,570 – would increase in line with inflation, average earnings, or 2.5%, whichever is highest.

However, a recent analysis from consultants Lane Clark & Peacock (LCP), found that around 2.5 million would still pay tax on their state pension even if the policy was put in place. LCP says this is because the Tory's model focused on the standard new state pension and ignored the fact that a large majority were on the "old" state pension syst.