One in five pensioners will be dragged into paying a higher tax rate by 2028 as a result of the Government’s frozen thresholds.

About 3.1 million retirees will have to pay the higher rate of 40 per cent, or additional rate of 45 per cent, new freedom of information data from HMRC, obtained by Quilter, shows.

More than a third of these – 1.3 million – are 70 or over.

State pensioners on lower incomes may also have to start paying income tax for the first time, with around 400,000 likely to be affected under current forecasts.

Anyone earning above £12,570 must start paying 20 per cent income tax – and with personal tax thresholds frozen until 2028, it is likely the state pension will rise above this level by then.

However, HMRC has confirmed it will not chase those who owe small amounts when the state pension rises above the personal allowance.

Taxpayers who are employed or get a private pension will be taxed via the Pay As You Earn (PAYE) system, where the money is taken straight from their payments. However, money from the state pension cannot be collected this way, and so pensioners are usually sent a “Simple Assessment” letter.

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HMRC said it would “not pursue hundreds of thousands of pensioners for tiny amounts of tax” adding it would “not normally issue simple assessments for tax that would cost more to collect than is owed. That would not be a good use of public funds.”

Although it has not confirmed how much this would constitute, it is likely those only receiving the state pension would owe a very small amount of tax.

Jon Greer, head of retirement policy at Quilter, said: “The number of pensioners likely to pay higher and additional rates of income tax as a result of frozen thresholds is set to increase exponentially by 2028, and not only will this boost government coffers by stealth, but it looks likely that other tax increases are on the cards.

“With the Labour Government’s first Budget now just over two months away, it is vital that people are managing their finances tax efficiently to help reduce their overall burden.”

Pensioners relying solely on the full new state pension could also face a small income tax bill of around 40p.

Labour is already facing criticism over reportedly considering plans to change the way pension contributions are taxed.

Contributions to pensions currently benefit from pension tax relief at a “marginal rate”, meaning basic-rate taxpayers get 20 per cent, higher-rate taxpayers 40 per cent, and additional-rate taxpayers 45 per cent relief.

Labour’s reported plans would mean this current tiered rate of pension tax relief would be merged into a new flat rate of either 20 per cent or 30 per cent.

If the rate were set at 30 per cent, it would mean higher-rate payers, those earning over £50,271, wouilld pay an effective 10 per cent tax charge on their pension and

Basic rate taxpayers, however, would in theory be better off than now.

The state pension increases each April in line with whichever is the highest out of wage growth, inflation or 2.5 per cent under the triple-lock policy, something the Labour government has pledged to continue.

Annual wage growth, including bonuses, was 4.5 per cent for the April to June 2024 period, according to recent figures.

If this were repeated in next month’s data – which is used to determine the triple lock – the state pension would rise above £12,000 next year, and with another 4.6 per cent increase the year after, it could reach £12,572 in April 2026.

It is unlikely that this would exceed the cost for chasing the tax, though campaigners and experts called for HMRC to clarify the exact figure it would pursue.

Dennis Reed, of the Silver Voices campaign group, said: “It’s disappointing Labour has no intention to raise the personal allowance. We will continue to push for them to change that.”

However, he said HMRC needed to clarify what amounts it would pursue. “Is it just 50p? Is it more? They should make this clear,” he told i.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown told i: “It’s a real positive that HMRC has confirmed it won’t pursue pensioners owing small amounts of tax on their state pension.

“The prospect of the state pension potentially breaching tax thresholds in the coming years will have caused worry to countless pensioners who are concerned about how much they might owe and how they might pay it.

“Publishing the limits that would apply would provide further comfort to those who may worry about a shock bill and help them plan their budget with more certainty.”

A HMRC spokesperson said: “No one will have to file a tax return because an increase in state pension takes them over the personal allowance.

“The majority of PAYE customers will have any tax owed collected via their tax code. Those who are not in PAYE or self assessment will be issued a Simple Assessment letter, which will inform them of any tax they need to pay.”

During the general election campaign, the Conservatives had outlined plans to increase the tax-free allowance for pensioners in line with the existing triple lock to ensure it rises each year – something called “triple lock plus”. Labour did not match this pledge.