Pensioners spend 30% of income on tax
Retired households spent 30% of their annual income on tax, data from Prudential revealed.
This comes as the ONS revealed the total annual tax bill for the UK’s 7.1 million retired households was £52.7bn from direct and indirect taxes.
Average retired household incomes, including state pension and other earnings increased by around £1,200 to just over £25,000.
Despite the increases in household incomes, the average retired household saw its tax bill rise by around £400 in the 12 months to April 2016.
Stan Russell, retirement income expert at Prudential, said: “People planning to give up work should make sure they don’t underestimate the impact that tax will have on their income in retirement.
“Saving as much as possible as early as possible during their working lives should help people to plan ahead with more confidence.”