The number of pensioners falling into the 60 per cent tax bracket has more than doubled in the past three years, a freedom of information request from Interactive Investor has revealed.

The FOI request to HMRC revealed that 77,000 pensioners (aged 66 plus) were caught in the 60 per cent "tax trap", earning between £100,000 and £125,140, in 2024/25, which is more than double the 34,000 pensioners falling into this tax bracket in 2021/22.

Much of this was recent growth, as the data showed that the number of pensioners paying 60 per cent had more than doubled between tax-year ending April 2022 and tax-year ending April 2025, rising by 13 per cent at the end of April 2025, amd 55 per cent in 2024.

Interactive Investor explained that individuals earning over £100,000 effectively pay 60 per cent tax on a portion of their income, because the £12,570 tax-free personal allowance is gradually withdrawn once income exceeds £100,000, disappearing once income hits £125,140.

The number of pensioners paying these higher tax rates is also expected to continue to grow, as Interactive Investor pointed out that, with the full state pension set to see a 4.8 per cent boost in 2026, frozen tax thresholds will mean that "dozens of thousands of pensioners who are still working will see 60 per cent of this rise swallowed up in tax".

Indeed, industry experts previously warned that whilst the state pension increase will be good news for many, it will also drag more and more pensioners into the tax net.

Solutions may be difficult to agree on though, as experts have acknowledged that removing the freeze on the personal allowance would come at a significant cost at a time when fiscal headroom is already strained, whilst any changes to the triple lock remain politically risky.

Interactive Investor pensions expert, Craig Rickman, said: “This data reveals the punishing impact of the 60 per cent tax trap on older workers, as frozen tax thresholds pull more pensioners’ incomes into six-figure territory.

"The threshold for losing the personal allowance has stubbornly stuck at £100,000 for more than 15 years, since it was introduced in April 2010.

"With the deep freeze on income tax bands set to endure until 2028/29, and fears the government could extend it even further, thousands more people above state pension age will be hit with punitive rates of tax on some of their income.

“More people now work well into their late 60s, including high earners at the peak of their careers. They often enjoy their work, and the continued sense of purpose, so want to carry on consulting or running a business until well into their golden years.

“However, there’s a risk that ultra-high tax rates could mean losing older talent. As taxes take an even bigger bite from the cherry, many older high earners will weigh up whether they’re better off stepping back and earning less, rather than risk facing such a heavy tax burden.”

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