• Login
SUBSCRIBE TO OUR NEWS EMAILS
Wednesday, 27 January, 2021
No Result
View All Result
BestAdvice
  • News
  • Features
  • Blogs
  • Podcast
  • Research & Reports
  • Video
  • MORTGAGES
    • Mortgage type
      • Discount mortgages
      • Fixed rates
      • Fee-free
      • Interest-only
      • Offset
      • Remortgages
      • Trackers
      • Variable rates
    • Conveyancing
    • First time buyers
    • Help to Buy
    • New build
    • Overseas
    • Regulation
    • Self build
    • Shared ownership
  • BRIDGING
  • BTL
    • Consumer BTL
    • HMOs
    • Limited Company BTL
  • COMMERCIAL
    • Asset finance
    • Auction finance
    • Commercial mortgages
    • Development finance
    • Invoice finance
    • SME finance
  • DISTRIBUTION
  • G.I.
  • LATER LIFE
    • Equity release
      • Lifetime mortages
      • Drawdown
    • Pensions
    • Retirement borrowing
  • LOANS
  • PROTECTION
    • Critical illness
    • Income protection
    • Group protection
    • Life cover
    • PMI
  • MORTGAGES
    • Mortgage type
      • Discount mortgages
      • Fixed rates
      • Fee-free
      • Interest-only
      • Offset
      • Remortgages
      • Trackers
      • Variable rates
    • Conveyancing
    • First time buyers
    • Help to Buy
    • New build
    • Overseas
    • Regulation
    • Self build
    • Shared ownership
  • BRIDGING
  • BTL
    • Consumer BTL
    • HMOs
    • Limited Company BTL
  • COMMERCIAL
    • Asset finance
    • Auction finance
    • Commercial mortgages
    • Development finance
    • Invoice finance
    • SME finance
  • DISTRIBUTION
  • G.I.
  • LATER LIFE
    • Equity release
      • Lifetime mortages
      • Drawdown
    • Pensions
    • Retirement borrowing
  • LOANS
  • PROTECTION
    • Critical illness
    • Income protection
    • Group protection
    • Life cover
    • PMI
No Result
View All Result
BestAdvice
No Result
View All Result

Tax takes a 29% chunk of pensioner income

by Kevin Rose
27 July 2012
Dominic Grinstead
Share on FacebookShare on TwitterShare on LinkedIn

Dominic Grinstead

The average UK pensioner household pays out 29% of its income in retirement to the tax authorities through a combination of direct and indirect taxation, which add up to an annual tax bill of nearly £42 billion, according to new analysis from MetLife.

On an average gross pensioner household income of £20,130, that equates to £5,864 paid out in tax, with income tax accounting for nearly £1,501 of the bill and indirect taxes including VAT totalling £1,937. Council tax is the third-largest tax burden accounting for 5.8% of gross income.

With an average tax liability of £5,864 for the UK’s 7.15 million retired households, the bill from direct and indirect taxation equates to around £41.9 billion.

In total, direct taxes, including income tax and council tax, account for 12.2% out of the 29% tax burden with indirect taxes, including VAT, duty on tobacco, alcohol and petrol, vehicle excise duty and TV licences, accounting for 16.8%.

However, MetLife found that less well-off households proportionally pay out the most in direct and indirect tax with 42% of their gross household income being paid out in tax. The bottom tenth of pensioner households, in receipt of gross income estimated at £8,259 a year, pay £3,599 in taxes.

The top 10% of pensioner households, with gross income of £47,992, see 29% of their income going in direct and indirect tax.

“Pensioners need to think about the effects of direct and indirect tax on their retirement income and to plan accordingly,” said Dominic Grinstead (pictured), managing director, MetLife UK.

“With 29% of gross retirement income being swallowed up by tax it is clearly a major factor to consider when planning for retirement.

“When you add in the potential effects of inflation in a retirement lasting up to 20 or even 30 years it is clear that savers need to consider all retirement income solutions in order to achieve a degree of certainty.”

MetLife’s analysis shows the average retired household receives 40% of its gross income from private and occupational pensions with 39% coming from the State Pension and the rest coming from investments and savings plus other benefits. The average private pension pays £8,134 per household before taxes.

ShareTweetShare
Previous Post

L&G publishes latest heart disease stats

Next Post

First direct makes rate cuts

Next Post
First direct makes rate cuts

First direct makes rate cuts

five-year

Accord reduces rates on five-year deals

Skipton Building Society

Skipton replaces 10-year deal

CLICK FOR COVID-19 LATEST

CSF: telephone account managers more important than ever

CSF: telephone account managers more important than ever

26 January 2021
Fiduciam provides TVR with CBILS loan

Fiduciam provides TVR with CBILS loan

26 January 2021
Virgin Money pulls selected 85% LTV purchase deals

Accord pulls 75% and 80% deals for 10 days

25 January 2021

LIMITED COMPANY BTL REPORT

Most Popular

  • Spanish property “as cheap as it gets”

    Pepper plans fivefold servicing growth in Spain with new platform

    0 shares
    Share 0 Tweet 0
  • AMI hits out at FSCS levy hike

    0 shares
    Share 0 Tweet 0
  • Royal London unveils Helping Hand discounts

    0 shares
    Share 0 Tweet 0
  • Fiduciam provides TVR with CBILS loan

    0 shares
    Share 0 Tweet 0
  • Paymentshield promises technological ‘war chest’ investment

    0 shares
    Share 0 Tweet 0

Receive BestAdvice briefings

   


   


   


Recommended

Variety in criteria searches for start of 2020

New role for Corker at Knowledge Bank

2 weeks ago
New lenders for coronavirus business loan scheme

Griffins joins ASTL

1 week ago
Openwork appoints chief commercial officer

Openwork appoints chief commercial officer

1 week ago
New specialist finance provider appoints VAS Group

Shawbrook expands bridging valuation panel

2 weeks ago
  • Subscribe
  • Advertise
  • About us
  • Contact us
  • Privacy policy
  • Terms & Conditions
SUBSCRIBE TO OUR ALERTS!

© 2018 Trek Publishing Limited. Website design by Bedazzled Media Limited.
Company Number 11335497. Registered Office: Butterick Building Unit K, 38 New Lane, Havant, P09 2ND

No Result
View All Result
  • MORTGAGES
    • Mortgage type
      • Discount mortgages
      • Fixed rates
      • Fee-free
      • Interest-only
      • Offset
      • Remortgages
      • Trackers
      • Variable rates
    • Conveyancing
    • First time buyers
    • Help to Buy
    • New build
    • Overseas
    • Regulation
    • Self build
    • Shared ownership
  • BRIDGING
  • BTL
    • Consumer BTL
    • HMOs
    • Limited Company BTL
  • COMMERCIAL
    • Asset finance
    • Auction finance
    • Commercial mortgages
    • Development finance
    • Invoice finance
    • SME finance
  • DISTRIBUTION
  • G.I.
  • LATER LIFE
    • Equity release
      • Lifetime mortages
      • Drawdown
    • Pensions
    • Retirement borrowing
  • LOANS
  • PROTECTION
    • Critical illness
    • Income protection
    • Group protection
    • Life cover
    • PMI

© 2018 Trek Publishing Limited. Website design by Bedazzled Media Limited.
Company Number 11335497. Registered Office: Butterick Building Unit K, 38 New Lane, Havant, P09 2ND

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.