Pensioners in the UK shelling out over £24bn in income tax

 
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Royal London said the amount of pensioners paying income tax had more than doubled since 1995-96 (Source: Getty)

The amount pensioners in the UK pay in income tax has ballooned to over £24bn, figures out today have shown. ​

Insurer Royal London obtained the information through freedom of information (FOI) requests to find out how much people over the state pension age were paying to the tax man in different parts of the UK.

In the latest year which HMRC had detailed figures for, 2015-16, Royal London said pensioners paid £24bn worth of income tax, with £21bn of it being footed by taxpayers in England.

Surrey pensioners shelled out the most, with a total tax bill of £961m, meaning they are paying more income tax than the entire retired population of Wales.

Kensington & Chelsea topped the list for the amount pensioners were paying in tax by local authority, as residents paid an average of £32,250 in 2015-16. That's around 27 times more than the area paying the least tax, Stoke on Trent UA, where pensioners paid just £1,192 on average.

The study also showed that the number of taxpayers over the age of 65 has doubled from 3.32m in 1995-96 to 6.49m in 2015-16 - although it's believed the number has reduced slightly to stand at 6.37m in 2018-19.

Read more: Pensioner households paying out nearly £9bn in income tax per year

Royal London added that more than a quarter of taxpaying pensioners were still in paid work, with 1.5m having an employment income and 500,000 getting an income from self-employment.

Steve Webb, director of policy at Royal London said:

Many people might assume that once you retire you cease to be of interest to the taxman. But these figures show that this is very far from being the truth. The number of taxpaying pensioners has nearly doubled in the last two decades. With talk of also requiring pensioners to pay National Insurance on any earnings or even pensions, the older population may start thinking of themselves as 'Generation still taxed'.

When planning for retirement it is vital to remember that the tax office will still want a slice of your income, which reinforces the need to put aside enough to secure a decent standard of living, even after the tax man has had his slice”.

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