Pensioners in the UK pay a total of more than £17.5 billion in income tax every year, according to new analysis by Prudential.
The insurer’s analysis of the most recently available ONS data on income and tax shows that in the 2012-13 tax year, over-65s paid an average of £3,258 each in tax. Collectively this accounts for 11 per cent of the £157 billion total income tax paid for the tax year.
The figures do however confirm that the amount of tax you pay falls after turning 65 – the average tax bill for over-65s in the UK is £2,300 lower than that for under-65s.
The Prudential analysis also shows that the distribution of income tax paid by over-65s across the country is skewed heavily towards London. In the capital, the average amount of income tax paid by over-65s was £8,386 – more than £5,000 higher than the UK pensioner average of £3,258.
Stan Russell, retirement income expert at Prudential, said: “These figures show that just because someone has retired from work doesn’t mean they have retired from paying tax, so taking into account the impact on retirement income is an important part of planning for a comfortable retirement. Discussing your retirement aspirations with a professional financial adviser is an important step for many towards achieving the best possible disposable income in retirement.
“For most of us, saving as much as possible as early as possible in our working lives remains the best way to help secure a comfortable retirement.”
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