Hmrc urged to increase personal tax free allowance to £15,518

CLARE STINTON, HEAD OF WORKPLACE SAVING ANALYSIS AT HARGREAVES LANSDOWN, WARNED: “FROZEN INCOME TAX THRESHOLDS ARE QUIETLY RESHAPING THE TAX LANDSCAPE, WITH MILLIONS MORE PEOPLE NOW PAYING

TAX" 10:35, 02 Jun 2025 The number of income taxpayers has surged to 37.7 million in the 2024/25 tax year with millions more workers and pensioners being quietly pulled into the tax

net. Clare Stinton, head of workplace saving analysis at Hargreaves Lansdown, warned: “Frozen income tax thresholds are quietly reshaping the tax landscape, with millions more people now

paying tax. "New figures reveal that there were six million more income taxpayers than there were five years ago, with 37.7 million of us paying tax in 2024/25. READ MORE SMART

MOTORWAYS COULD BE SCRAPPED FROM ENGLAND ENTIRELY "This is fiscal drag in action - a stealth tax that quietly increases the tax burden across the board." She added: "Since

2021/22, the personal allowance has been stuck at £12,570. If it had kept pace with inflation, it would be around £15,518 today. Article continues below "Instead, millions on modest

incomes have been dragged into paying tax for the first time. "The cost-of-living crisis hasn’t gone away, and now lower earners must factor tax into their long list of essentials. With

the freeze set to remain until 2028, the impact is only set to deepen.” Ms Stinton added: “Pensioners are particularly at risk... if the State Pension continues to rise at a similar pace,

more retirees could soon find themselves crossing the personal allowance threshold and paying tax on their State Pension alone." Article continues below “That’s why it’s more important

than ever to be proactive with your tax planning,” said Ms Stinton. “Paying into your pension can help keep total taxable income below income tax thresholds, while at the same time boosting

your retirement savings. A double win. "And for those saving for retirement, it’s worth thinking long-term. If you’re aiming for a retirement income that may exceed future tax

thresholds, consider using ISAs alongside a pension. Income taken from an ISA is tax free so can be used alongside a pension to give you much needed flexibility in managing your tax bill.”