Number of taxpaying pensioners doubles to 6.5m in 20 years

The number of taxpayers over the age of 65 has nearly doubled from 3.32 million in 1995-96 to 6.49 million in 2015-16, Royal London has found.

Figures obtained from the government under the Freedom of Information Act requested by Royal London, show that the total amount of income tax paid by pensioners in 2015/16 was £24bn, equating to an average annual pensioner tax bill of £3,522.

Of that total, £21bn came from England, £1.7bn from Scotland, £0.8bn from Wales and £0.4bn from Northern Ireland.

With 2015-2016 being the last year for which detailed figures are available, the mutual insurer has estimated that the number of people over 65 paying tax has stabilised and now stands at around 6.37 million for the 2018/19 tax year.

The company has also found that more than a quarter of taxpaying pensioners are still in paid work: 1.5 million have employment income and half a million have income from self-employment.

The five local authorities with the highest pensioners tax bill were Surrey (£961m), Hampshire (£763m), Essex (£756m), Greater Manchester (£646m) and Kent (£645 million). This means that pensioners in Surrey are paying more in income tax than pensioners across the whole of Wales.

Royal London director of policy, Steve Webb, 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.

“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’.”

    Share Story:
An alternative approach
Laura Blows speaks to NEST’s CIO Mark Fawcett to discuss its investment into alternative asset classes

All change
Laura Blows speaks to PMI president Lesley Carline about how the institute is continuously adapting to cater to evolving industry requirements