Pensioners are paying £4,262 more in tax to live comfortably compared with five years ago, analysis shows.
A single pensioner now needs a post-tax income of £45,400 to enjoy a “comfortable” retirement, according to the latest calculations by Pensions UK, the trade body.
This means a retiree would require an income of £54,720 before tax to maintain this lifestyle, resulting in an income tax bill of £9,320 in 2025-26.
Higher living costs and frozen tax thresholds have seen this tax hit almost double since 2020-21, when a pensioner would have paid £5,058 to the taxman to live comfortably in retirement.
A comfortable retirement is defined by Pensions UK as having enough money for luxuries such as an annual two-week holiday in Europe, with about £78 a week available to spend on groceries and £66 a week for takeaways or meals out.
Cost of living pressures including rising energy bills and food inflation have pushed the post-tax income needed by a pensioner up by about £250 a week since 2019, according to the latest Retirement Living Standards report.
At the same time, income tax thresholds have been frozen since 2020-21, and Rachel Reeves, the Chancellor, confirmed last year that they would remain so until April 2031.
The freeze has pulled millions of workers and pensioners into paying income tax for the first time, a process known as fiscal drag.
