There are now an estimated 39.1m income taxpayers, up 6.1m from when thresholds were frozen in 2021/22, according to analysis of HMRC figures.
There are an estimated 30.4m basic rate tax taxpayers, up 3m since the 21/22 freeze.
The number of higher rate taxpayers has climbed up 2.65m to 7.08m, while there are 1.23m additional rate taxpayers, up 710,000, the figures show.
Some 8.7m taxpayers are now over state pension age, a figure that has risen 29% since the freeze.
Helen Morrissey, head of retirement analysis, Hargreaves Lansdown, said: “There are millions more taxpayers than when income tax thresholds were frozen, millions more paying higher rates of tax, and millions more people over the state pension age getting a bill from the taxman.”
She said the frozen income tax thresholds “have taken a horrible toll, so that more than a fifth of taxpayers now pay higher or additional rates.”
“Between us, we’re paying billions more in tax than we did this time last year, and it’s only going to get worse, because those tax thresholds have been frozen until April 2031. It means the idea of generating a tax-free income has become even more attractive.”
The firm suggests a range of ways to minimise tax, such as renting a furnished room to a lodger, as the first £7,500 of rent each year is tax free under the rent-a-room scheme.
Another idea is to make money from a hobby as the first £1,000 of income from a hobby is tax free.
Ms Morrissey also pointed out that income from stocks and shares ISAs is tax free, as is income withdrawn from a Lifetime ISA at age 60 or over.
She suggested couples share assets to double their tax-free allowances, such as income-producing assets.
Purchased life annuities can generate a tax-free income too, she pointed out. Ms Morrisssey said: Life annuities are designed to provide a guaranteed income for life or over a fixed term, in exchange for a lump sum that’s not from a pension. Part of the income paid is deemed to be a return of your original investment and therefore is tax free.
"The interest element of the income is taxable, but no tax will have to be paid if it falls within the personal allowance or personal savings allowance."
The figures are taken from the HMRC tables released in June 2025: Table 2.1 Number of individual Income Tax payers - GOV.UK