More retired baby boomers are paying income tax than Gen Z workers in a dramatic reversal of the pre-lockdown trend, official figures show.
Data published by the taxman shows 5.45m Britons aged over 70 paid income tax in the 2022-23 financial year, compared with 5.23m aged under 30.
It comes as the triple lock drags more pensioners into the tax bracket while a rise in youth worklessness leaves more young people on the sidelines of the jobs market.
The data highlights how Britain is becoming increasingly reliant on pensioners for income tax, which is the single biggest revenue raiser for Rachel Reeves.
The HM Revenue and Customs (HMRC) data also revealed that the number of top rate taxpayers rose by 10pc to 600,000 in the 2022-23 tax year, while the number of higher rate taxpayers increased by 680,000 to 5.1m.
The triple lock, which ensures state pension payments rise by at least 2.5pc each year, has led to several years of above-inflation increases. This has dragged more retirees with even modest private pensions into the income tax net, following a six year freeze in tax-free personal allowances.
A rise in youth worklessness since the pandemic also means more young men and women are not even looking for work, with almost 1m 16 to 24-year-olds not in employment, education or training.
The HMRC data represent a reversal from pre-Covid trends, 4.65m people aged over 70 paid income tax in 2019-20, compared with 4.8m taxpayers aged under 30.
Retired baby boomers are handing more of their earnings to the taxman than their younger counterparts, despite no longer working.
Over 70s paid £19.1bn in income tax receipts in 2022-23, compared with £18.3bn in tax receipts paid by under 30s, HMRC figures for the 2022-23 financial year showed. This is despite the elderly representing a much smaller share of the overall population.
Separate analysis by the Institute for Fiscal Studies last year showed that over 65s are now more likely to pay income tax than those aged between 16 to 64. Two thirds of pensioners now pay income tax, compared with 64.4pc of working age Britons, according to the think tank.
The HMRC data showed that while roughly four fifths of the workforce, or 28m workers, are subject to the basic – or 20p rate – of income tax, they account for just £75.6bn, or a third, of tax revenues.
The 5m taxpayers on the higher rate account for £85.1bn, or another third, of tax revenues. Those paying the 45p rate account for £83.4bn, or a further third of tax revenues, despite only representing 2pc of the overall workforce.
The number of top rate taxpayers is on course to rise further after Jeremy Hunt, the former Chancellor, lowered the threshold at which people start paying the 45pc rate of income tax from £150,000 to £125,140 in autumn 2022.
