Pensioners pay £24bn in income tax, figures reveal
PENSIONERS paid a £24 billion total income tax bill in 201516, analysis from a mutual insurer has found.
Within this, around £21 billion came from England, nearly £1.7 billion was from Scotland, over £800 million came from Wales and more than £400 million was from Northern Ireland, according to Royal London.
It made the findings following analysis of a Freedom of Information (FOI) response from HM Revenue and Customs (HMRC), as well as using data from published sources.
The tax paid by pensioners would be on various sources of income, such as employment, self-employment and property.
Royal London found that between the mid-1990s and the mid-2010s, the number of taxpayers aged over 65 has nearly doubled – from 3.32 million in 1995-96 to 6.49 million in 2015-16, the most recent year for which detailed figures are available.
It is estimated that the number has broadly stabilised since then, and stands at around 6.37 million in 2018-19, Royal London said.
Figures supplied to Royal London for 2015-16 also included around 400,000 women who had reached their state pension age but were aged under 65.
It found that among the 6.87 million taxpaying pensioners in 201516, the average annual tax bill was £3,522.
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 Sir Steve Webb
Some 3.87 million men paid an average bill of £4,341, while three million women paid £2,467 on average.
Looking at average pensioner tax bills, the highest were found in the London borough of Kensington and Chelsea – where the average pensioner who pays income tax forks out £32,250. The London boroughs of Westminster, Camden, Barnet and Hammersmith and Fulham were also in the top ten.
Sir 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 tax-paying pensioners has nearly doubled in the last two decades.”