The revelation comes as pensioners were hit in the pocket because they did not benefit from National Insurance cuts in the last two Budgets.
Older voters, who are more likely to see the reduction of immigration as a priority, have recently been turning away from the party over Mr Sunak’s failure to deal with the small boats, leading to a large swing towards Reform UK among pensioners.
Half of landlords are over 55, and many may lose out under Michael Gove’s decision to strip tax relief from owners of short-term lets.
The threshold at which people start to pay income tax was frozen at £12,570 by Rishi Sunak in 2021, and the freeze was extended to the end of 2028 by Mr Hunt.
It means that every year, more and more older people are having to pay the levy as their income from the state pension and private pensions increases along with inflation – known as fiscal drag. Without the freeze, the allowance would have risen to £15,220 in 2024-25 and up to £15,990 in 2027-28.
According to the Institute for Fiscal Studies (IFS), well over 60 per cent of over-65s now pay income tax, up from around 50 per cent in 2010.
The House of Commons Library research showed that this total will increase still further over the next four years. It found that, in this financial year, up to 1.2 million more pensioners will pay income tax than if the threshold had been increased along with prices since 2021. By 2027-28, this total will have risen to between 1.4 million and 1.6 million.
Baroness Altmann, a former Tory pensions minister, said: “I do think it is worrying that so many more pensioners could be dragged into the tax net as the state pension may soon rise above the frozen threshold.
“Most of those tipped into tax will be poorer pensioners with little more than their state pension to live on. Most of them will be totally unaware of any liability and will never have filled in a tax return in their life. They are then at risk of being hit with fines and penalties for not paying a tiny amount of tax that they didn’t even know about.”
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
