More retired baby boomers are paying income tax than Gen Z workers, new data from HMRC shows.
It is a significant shift since the pre-COVID period.
Some 5.45 million Britons aged over 70 paid income tax in the 2022-23 financial year (the latest figures we have), compared with 5.23 million aged under 30. (Generation Z covers those born between 1995 and 2012.)
Over-70s paid £19.1bn in income tax, compared with £18.3bn by under-30s, as Britain becomes increasingly reliant on its retirees.
Baby boomers have seen their tax bills rise, as many with even modest private pensions have been dragged into the income tax net because of the triple lock.
That guarantees the state pension rises in line with average earnings, inflation, or 2.5% – whichever is highest.
In addition, the thresholds at which people start paying income tax have been frozen since 2021 – rather than going up in line with inflation.
With this freeze due to last until 2028, the amount of income tax being paid across all age groups is only set to rise.
The HMRC data dump also revealed the number of higher rate taxpayers (40p) increased by 680,000 to 5.1 million people in 2022-23 – another consequence of frozen thresholds.
The number of top rate (45p) taxpayers rose by 10% to 600,000.
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The figures show that while roughly 80% of the workforce pay the basic rate of income tax, they account for only around 33% – or £75.6bn – of total tax revenues.
The five million taxpayers on the higher rate account for another third of tax revenues (£85.1bn).
Those paying the 45p rate account for a further third (£83.4bn) despite only representing 2% of the workforce.
We thought it would be interesting to see how all this compares with pre-COVID, so we looked back at the 2019-20 data…
You can see income tax revenues have increased massively – and how, back then, more under-30s were paying income tax than retirees.
