The number of pensioners paying the highest rate of tax has doubled in just a year following a cut in thresholds.

More than 100,000 taxpayers over the age of 65 will pay 45p in the pound on their income in the 2023-2024 tax year, projected HM Revenue & Customs (HMRC) figures have revealed.

This is up from just 55,000 the year before, according to the data released to The Telegraph under a Freedom of Information request.

The number of pension-age taxpayers hit by the top income tax rate has quadrupled over the decade, the figures show.

A further 810,000 will pay higher rate tax, an increase of more than 21pc from the 666,000 who paid the 40pc rate in 2022-20223.

With close to a million paying the highest rate overall, it means over-65s now account for around one in 10 additional-rate payers.

Former pensions minister Sir Steve Webb, now partner at consultants LCP, said that the number of pensioners paying the highest rate was “astonishing”.

He said: “This reflects both the big cut in the starting point for additional rate tax and significant pension increases to keep pace with inflation.

“With more than a million pensioners set to pay tax at 40pc or above in the coming years, the new Government needs to urgently consider whether relying on ‘fiscal drag’ to push more and more people into higher tax bands is a sustainable strategy.”

Jeremy Hunt cut the point at which the 45p tax rate kicks in from £150,000 to £125,140 in his 2022 Autumn Statement, pushing thousands into the highest band.

Sustained freezes on income tax bands are expected to drag an additional three million workers into the 40pc rate of tax in the next five years, as inflation pushes up wages.

The state pension is also forecast to exceed the size of the so-called personal allowance – the amount you can earn before income tax kicks in – within two years, based on current forecasts for the triple lock.

The Conservatives repeatedly warned during the general election campaign that Labour would hit pensioners with this “retirement tax” if the party came to power.

The new Government has so far failed to match the Tories’ “triple lock plus” election pledge which would in theory have shielded pensioners from paying tax on their state pension in this way.

The triple lock ensures that the state pension rises each year by the highest of inflation, average earnings or 2.5pc.

It comes as Rachel Reeves, the Chancellor, is understood to be considering proposals for a flat 30pc rate of pension tax relief – meaning that higher rate payers will pay an effective 10pc tax charge on their retirement contributions for the first time.

The proposal to scrap the current 40pc higher rate pension tax relief, which cost the Treasury £50bn each year through different tax reliefs, has been presented to successive chancellors since 2010.

The plan would affect up to six million higher and additional rate taxpayers, costing the wealthiest savers around £2,600.

Tom Selby, of broker AJ Bell, said: “The surge in the number of taxpayers of all ages, including pensioners, paying higher and additional-rate tax is an inevitable consequence of the deep freeze of thresholds introduced by the previous government.”

He added: “These numbers will almost certainly keep climbing among all age groups. Average pensioner incomes also climbed significantly between 2010 and 2020, further driving up the tax burden among this cohort.”

The freeze to thresholds was introduced in March 2021, when then-chancellor Rishi Sunak announced that the tax-free personal allowance and higher-rate thresholds would be frozen for up to four years. This was extended until 2028 by Jeremy Hunt at the Autumn Statement in 2022.

The long freeze on income tax thresholds will rake in £44.6bn per year by 2028-29, equivalent to a 10 percentage-point rise in National Insurance, according to the OBR.

A spokesman for the Government said: “Older people should be able to live with the dignity and respect they deserve, and the state pension is the foundation for this. We are committed to the triple lock, and pensioners whose sole income is the new state pension and who have not deferred or receive protected payments do not pay any income tax.”

Read more @telegraph