Pensioners giving 27% to the tax man

More than a quarter of the average pensioner household’s income is going to the tax office, a report out today claims.

Pensioner households give an estimated £5,124 (27 per cent) of the average gross income of £18,834 to HM Revenue & Customs through a blend of direct and indirect taxes, according to research by pension firm MetLife.

Income tax accounts for £1,300 of that, on average, while indirect taxes including as VAT and duties such as those paid on alcohol, tobacco and fuel add up to £2,966, 15.7 per cent of the tax total. The biggest tax liability is faced by less well-off households, with a third of the income received by the bottom fifth of households going on tax.