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

MKC Invest backs robotics as physical AI takes off

MKC Invest backs robotics as physical AI takes off

Conducts four-week internal research project

Sophia Panayi
clock 03 July 2026 • 2 min read
Feel Good Friday: Free paraplanning mentoring initiative expands

Feel Good Friday: Free paraplanning mentoring initiative expands

The Paraplanner Club partners with Fundment

Professional Adviser
clock 03 July 2026 • 1 min read
Wesleyan launches two with profits funds for advisers

Wesleyan launches two with profits funds for advisers

Available on Aberdeen, Nucleus, Wealthtime and Hubwise platforms

Sophia Panayi
clock 03 July 2026 • 2 min read