Overview
- New HMRC figures for 2023/24 show 5.76 million people paying the 40% rate, up 50% since 2019/20, and 893,000 paying the 45% rate, a 57% jump in a year.
- HMRC links the shift to fiscal drag, where tax bands stay fixed while wages rise, with the higher‑rate threshold stuck at £50,271 since 2021/22.
- Higher‑rate taxpayers provided 32.0% of income tax receipts and additional‑rate payers 37.7% in 2023/24, as more mid‑career teachers, nurses and police enter higher bands.
- Taxpayers over 66 rose to about 8.16 million, and the full New State Pension for 2026/27 is roughly £12,547–£12,548, leaving only a few pounds before the £12,570 tax‑free allowance and pushing any extra pension income into tax.
- The freeze is set to run until 2030/31, the government has pledged to spare people with only the State Pension from tax and returns with details still to come, and a cap on salary‑sacrifice pension exemptions from April 2029 is forecast to raise about £4.7bn.