View more on these topics

Tax paying pensioners nearly double in 25 years

Tax-Taxation-Blocks-700.jpgThe number of taxpaying pensioners has nearly doubled since the mid-1990s, a Freedom of Information Act request has revealed.

An FOIA request to HM Revenue and Customs by Royal London shows the growing tax bills faced by pensioners in different parts of the country.

Between the mid-1990s and the mid-2010s the number of taxpayers over the age of 65 nearly doubled from 3.3m in 1995-96 to 6.5 million in 2015-16.

It is estimated that the number has broadly stabilised since then, and stands at around 6.4 million in 2018-19.

Analysis of the data relating to nearly 7m taxpayers over state pension age in 2015-16 shows the average annual tax bill is £3,522.

For the 3.87m men the average bill is £4,341 and for the 3m women the average is £2,467.

More than a quarter of taxpaying pensioners are still in paid work. 1.5m have employment income and 500,000 have income from self-employment.

Royal London director of policy Steve Webb says: “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.”

Recommended

3

HMRC refuses to budge on pensions withdrawal tax

HM Revenue and Customs will not change the way it taxes flexible pension drawdown payments saying any changes would not improve the tax position of consumers. In its June pension schemes newsletter, HMRC says the review of the current system has concluded the existing process remains the most effective method of deducting tax. It says […]

Magnifying-Glass-And-Text-Kindle-Contract-700x450.jpg
2

Govt to examine pensions tax relief fairness

The government has said it will “examine the process for payment of pensions tax relief” in response to concerns low-paid workers in net pay schemes are losing out. Addressing the House of Lords on Monday night, parliamentary under secretary of state for pensions Baroness Buscombe said the government wants to make the most of any […]

Sustainability Q&A

Following his latest webinar ‘Has sustainability been Trumped’ Mike Fox answers questions in relation to how Trump’s environmentally unfriendly policies might affect sustainable investment strategies. Read the article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. John Stirling 9th July 2018 at 9:48 am

    With two thirds of the country’s wealth being in the hands of senior citizens, who would conclude that those over state pension age cease to be of interest to HMRC.

    The number of tax paying pensioners has increased by almost 100% – how has the number of pensioners changed over the same timescale? I assume it has gone up significantly.

  2. Kenneth Hislop 9th July 2018 at 11:52 am

    An increase in people accessing benefits flexibly surely has to have had a big impact on the number of people paying tax?

  3. A confirmation of either poor planning or no advice. Not hard to have £500k in PEPs and ISAs over this period. Insurance bonds too if funded to max in the forgoing. Careful pension planning to ensure that pension income doesn’t generate more than basic rate – or perhaps no pension at all and just ensure the wife also has PEPs ISAs and Bonds. Then nil on the tax return and nil tax on income. Bonds deferred tax for 20 years – so start withdrawing at (say) 70 and who gives a toss at tax at 90 – anyway with good planning – remain a basic payer and then no tax anyway.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com