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

OBR leak 'embarrassing' as Selby calls for pension stability after Autumn Budget

OBR leak 'embarrassing' as Selby calls for pension stability after Autumn Budget

AJ Bell’s Tom Selby joins Sahar Nazir in the studio to unpack the Budget

Sahar Nazir
clock 28 November 2025 • 1 min read
Andrew Goodwin: Advisers shouldn't have to be told to improve

Andrew Goodwin: Advisers shouldn't have to be told to improve

'The fact is that nobody stays ahead of the curve by standing still'

Andrew Goodwin
clock 28 November 2025 • 4 min read
Treasury Committee chair welcomes plan to replace Lifetime ISA

Treasury Committee chair welcomes plan to replace Lifetime ISA

LISA is ‘too complex'

Sahar Nazir
clock 28 November 2025 • 2 min read