Pensioners pay 27% of income on tax
Analysis shows less well-off households pay up to 33% of income on tax
PENSIONER households pay out an average of 27% of its income in retirement in tax, a report has claimed.
Analysis from financial and insurance institution MetLife, based on the Office for National Statistics’ Wealth and Assets Survey, shows that pensioners pay an annual tax bill of £34bn.
It says that of the average pensioner household income of £18,834, income tax accounts for almost £1,300 and indirect taxes total £2,966.
Less well-off households pay a higher proportion in tax at around 33% of their income. This is because of the relatively high proportion of indirect tax costs.
Dominic Grinstead, managing director of MetLife Europe Limited UK, said: “Tax does not end when you stop working and 27% of gross retirement income being swallowed up by tax is a major factor to consider when planning for retirement.”