More over-65s pay additional-rate income tax

The number of pensioners paying income tax at the additional rate of 45% has increased over the past three years, government statistics show.

In 2019/20, income tax is charged at a basic rate of 20% for annual income between £12,501 and £50,000, while the higher rate of 40% applies between £50,001 and £150,000.

For income above £150,000, the additional rate is charged at 45%.

In the 2018/19 tax year, 37,000 people above state pension age were paying the additional rate - up from 34,000 in 2016/17.

Meanwhile, the number of people in this age group paying the higher rate of income tax, at 40%, fell from 514,000 to 508,000.

In 2018/19, the higher rate applied to income between £46,351 and £150,000.

The statistics were provided by Lord Young of Cookham in a parliamentary written response to a question from Baroness Ros Altmann, who asked for data on pensioners earning more than £50,000.

In total, 474,000 pensioners had a total annual income above this amount in 2018/19, compared to 418,000 two years earlier.

A third of those were over the age of 75, while 36% were between the ages of 65 and 69.

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