Industry reacts to 'agonising pain' of fiscal drag

An estimated 37.4 million income taxpayers for the 2024/25 tax year

Sahar Nazir
clock • 2 min read

There has been a sharp increase in the number of people paying income tax, according to latest figures from HM Revenue & Customs (HMRC), underscoring the impact of frozen tax thresholds and fiscal drag on the UK population.

The data shows an estimated 37.4 million income taxpayers for the 2024/25 tax year, a 13% rise from 2021/22, translating to 4.4 million more people paying tax. Pensioners have been particularly affected, with 8.5 million taxpayers over state pension age—a 26% increase since 2021/22. Hargreaves Lansdown head of retirement analysis Helen Morrissey highlighted the dual nature of the rise: "Frozen tax thresholds are biting down hard on pensioner incomes. This is due in part to pensioners having larger incomes in retirement, which is positive. "However, the deep freeze on tax thresholds...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Cash ISA allowance cut risks hardening saver/investor divide, advisers warn

Cash ISA allowance cut risks hardening saver/investor divide, advisers warn

Govt policy shift reignites debate around role of cash ISAs

Sahar Nazir
clock 28 January 2026 • 5 min read
Depledge Strategic Wealth Management backs CISI financial planning push

Depledge Strategic Wealth Management backs CISI financial planning push

‘Financial planning is for every week’

Jenna Brown
clock 28 January 2026 • 2 min read
What a classic '80s movie tells us about today's language of financial advice

What a classic '80s movie tells us about today's language of financial advice

'Forty years is a long time in film. Even more so in financial services'

Roger Brosch
clock 27 January 2026 • 4 min read