Chancellor Racher Reeves’ proposed income tax raid could cost more than nine million pensioners an extra £380 a year on average. In the upcoming Budget, the chancellor is expected to rise income tax by 2%, while cutting national insurance by 2% for those earning under £50,270. This means workers’ take-home pay below the threshold will not be affected. However, it also means that pensioners and landlords who pay income tax but not national insurance will be facing a tax rise. Taxpayers stop contributing to national insurance once they reach state pension age, regardless of whether they continue to work.

The average pensioner has an annual taxable income of £19,023 — once their £12,570 tax-free personal allowance is deducted — meaning they face an extra £380 a year in tax under a 2% rise, according to the analysis of HM Revenue & Customs (HMRC) data by the consultancy LCP, reported by The Times. Pensioners in the top quarter, whose annual taxable income is at least £23,039, will pay a minimum of around £460 extra a year.

According to LCP, some 9.3 million pensioners already pay tax as of this year, and the number will increase as frozen tax thresholds collide with the rising state pension. Under the triple lock, the full state pension will rise to £12,548 a year in April, just shy of breaching the tax-free personal allowance, which is frozen at £12,570, with another triple lock rise in 2027 likely taking it over the limit.

Steve Webb, a former pensions minister and partner at LCP, told The Times: “Millions of pensioners have already suffered from the freezing of tax thresholds, which has brought more of their income into tax, and means more pensioners each year start paying tax at the higher rate.

“Pensioners with incomes over the £35,000 threshold will also lose their winter fuel payments, so an increase in income tax rates could be a ‘triple whammy’ for this group.”

The proposal to cut 2% from income tax and add it to national insurance came from the left-leaning think tank the Resolution Foundation, led by the pensions minister Torsten Bell until last year when he became the MP for Swansea West.