Retirees pay £ 2,700 more taxes to live comfortably compared to four years ago thanks to a stealthy raid on income, shows the analysis.
Only one retiree had to pay £ 5,058 income tax in 2020-2010 to reach the level of expenses necessary for a “Comfortable” retirement.
However, higher subsistence costs and frozen tax thresholds The average retirees are stung with the increase in tax bills to obtain the same lifestyle. A retiree should have paid £ 7,787 in tax in 2023-24 to reach this reference – an increase of £ 2,729, or 54pc.
A “comfortable” retirement is defined by the commercial organization of pensions and lifetime Savings Association (PLSA) as having enough money for luxuries such as regular beauty treatments, theater trips and two -week vacation in Europe each year, with about £ 70 to spend for grocery store and £ 60 over meals per week.
The increase in the cost of energy, grocery, vacation and driving means that a single retiree needed a post-tax of £ 43,100 for a “comfortable” retirement in 2023-24, against £ 32,800 in 2020-2021, according to PLSA.
In the meantime, income tax thresholds have been frozen since 2020-2010 and should remain so until 2027-28. Chancellor Rachel Reeves has not excluded the frost.
This means that millions of taxpayers, including retirees, have been forced in higher hooks While inflation increases income in a process known as “budget trail”.
Jon Greer, head of retirement policy in Quilter, said that the results have shown that the budget trail “re -entered” the landscape of pensions.
He added: “Retirees find themselves increasingly surprised paying constantly increasing tax amounts. The cost of maintaining a decent standard of living has increased sharply in recent years, but income tax thresholds have remained unchanged.
“Consequently, retirees are now paying much more taxes than they were a few years ago – not because their income increased, but because the system has not followed the rate of inflation.
“This rampant tax burden risks undermining retirement security for thousands of people who have done everything correctly. They saved diligently, planned with care and expected a stable system in return. Instead, they are taxed more simply to stay still. ”
It comes after Analysis separated by the telegraph have noted that 650,000 additional retirees will be forced to pay a income tax on their only state retirement income in 2025 to 26, bringing the total number to around 3.25 million.
The new “complete” state pension reached £ 11,973 this month thanks to a 4.1PC “Triple lock” salary increase. It is possible to stimulate a state pension above the provision threshold for a personal person of £ 12,570, which means that many retirees are already paying tax on their state retirement income. Rishi Sunak, the former Prime Minister, nicknamed this phenomenon the “retirement tax”.