TYPICAL pensioners are paying 30 per cent of their modest incomes to the Exchequer, contributing £45.6bn in total, according to a report released today.
Prudential, one of the world’s biggest providers of life insurance and pensions, says that the average retired household paid £6,400 in tax during the 2011-12 financial year, from a gross income of only £21,300. This means that a retired population of over 7m will contribute nearly £50bn to the Treasury’s coffers.
The research says that for the typical household of retirees, £3,800 of their tax bill is accounted for by indirect taxation like VAT, fuel duty, and alcohol and tobacco taxation. The two largest individual taxes for pensioners generally are income tax and VAT, which each take up eight per cent of the typical income.