Pensioners paying an average of £100 a week in various taxes

A report released today shows that British pensioners are paying an average of £100 a week in different taxes.

The report written by the insurance company Met Life has discovered that the average retired household, both singles and couples, pay more than £5000 per year to the taxman.

The largest proportion of the annual £34 billion tax bill is made up of income tax, which OAPs still have to pay once they have retired.

Other taxes that add to the total include VAT—currently at 20%, petrol duty, vehicle tax and the TV licence, which needs to be paid until a person reaches 75.

The report found that the average pensioners’ household has a gross income of £18,834 each year and pays £5,124 in taxes.  This equates to 27% of their income or just under £1 for every £4.

Managing Director of Met Life Europe, Dominic Grinstead, said: “Tax does not end when you stop working.

“The fact that 27 per cent of their gross retirement income is being swallowed up by tax is a major factor to consider when planning for retirement.”

Statistics from HM Revenue and Customs show that there are 4 million taxpayers who are over 65, a million more than 10 years ago.

The report from Met Life was based upon figures from the Office for National Statistics (ONS) and also shows that poorer pensioners are paying an even higher level of tax than those better off.

Pensioners with an income of £9445 a year are paying out 33% of their income (£3,175) in taxes each year compare to the 27% average OAP tax bill.

The burden of paying so much tax falls heaviest for those who have fixed pension incomes, these pensioners are already struggling to cope with the increasing inflation costs.

In addition to this they will be losing out on interest on their savings as the interest rate remains at its lowest level of 0.5%.

The campaign group Save Our Savers are holding a demonstration outside of the Bank of England’s headquarters in the City of London tomorrow.  Organisers of the demonstration are planning to smash a giant piggy bank to show how badly savers are being treated.

Spokesman for the Save Our Savers group, Simon Rose said: “For the millions of pensioners who depend upon their savings, the future is terrifying.”