Pensioners pay extra £4bn tax

PENSIONERS are paying around £4billion a year more in income tax than previously thought because of an error, HMRC figures reveal.

A total of £17.9billion was raised by taxing retired people’s private and workplace pensions in the financial year to April 2017. This has been revised up from an estimate of £13.5billion because the taxman has started using more reliable methods to calculate payments.

It highlights the contribution to the public finances made by pensioners and was seized on by campaigners trying to protect the tax relief workers get when paying into a pension.

Former pensions minister Sir Steve Webb, now policy director at savings firm Royal London, said: ‘It is outrageous that the Government has sneaked out these massive revisions to the figures without any comment.

‘It turns out that pensioners are paying more than £4billion extra in tax on their pensions than the Government previously admitted.’