Surrey pensioners pay most tax

Published by Rachel Lacey on 09 July 2018.
Last updated on 09 July 2018

Guildford town clock

Surrey pensioners are paying £945 million in in tax every year, according to a Freedom of Information request from mutual insurer and pensions firm Royal London.

This means that retirees in one of the UK’s wealthiest counties are paying more in income tax than pensioners across the whole of Wales, who paid a total of £800 million.

It was also well ahead of the second highest paying county, Hampshire, where pensioners paid a collective £763 million in income tax. Essex came in third at £756 million.

The analysis also revealed that the number of over-65s who pay tax has nearly doubled from 3.32 million in 1995/6 to 6.49 million in 2015/16 (the most up-to-date figures available).

Of the 6.87 million pensioners over state pension age who pay tax in the UK, the average annual income tax bill is £3,522. This rises to a typical £4,341 for men and £2,467 for women.

Analysis of individuals at a local authority level found that, pensioners in Kensington & Chelsea paid the most income tax – with an average pensioner tax bill of £32,250 a year, followed by Westminster at £28,938 a year. Moving away from London, pensioners in South Buckinghamshire paid £14,111, while pensioners in Elmbridge, Surrey paid £9,500.

The top 10 local authorities where pensioners pay the most income tax:

Local authority Tax bill of average pensioner
Kensington & Chelsea £32,250
Westminster £28,938
Camden £18,692
Epping Forest £14,133
South Bucks £14,111
Barnet £9,606
Elmbridge £9,500
Hammersmith and Fulham £8,462
Mole Valley £8,000
Cotswolds £7,769


Amongs the local authorities where pensioners paid the least income tax were Stoke-on-Trent and Stockton-on-Tees, where pensioners paid an average £1,192, and Blaenau Gwent where they paid a typical £1,286.

The 10 local authorities where pensioners pay the least income tax are:

Local authority Tax bill of average pensioner
Redcar & Cleveland £1,737
Sunderland £1,727
Coventry £1,700
Blackpool £1,667
Sandwell £1,667
East Ayrshire £1,667
Kingston upon Hull £1,444
Blaenau Gwent £1,286
Stockton-on-Tees £1,192
Stoke-on-Trent £1,192


Steve Webb, director of policy at Royal London, says: “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. The number of taxpaying pensioners has nearly doubled in the past two decades.”

He adds: “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’.

“When planning for retirement it is vital to remember that the tax office will still want a slice of your income, which reinforces the need to put aside enough to secure a decent standard of living, even after the tax man has had his slice”.

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