According to figures released by the pension, insurance and investment company, Aegon, working pensioners are on course to pay £8.6 billion in income tax in 2018/19.
The number of pensioner households containing at least one person working beyond their state pension age increased from 12% in 1997/98 to an estimated 17% in 2018/19. Aegon estimates there are around 12.8 million people living in 8.7 million pensioner households in the UK, with around 1.4 million homes containing a working pensioner.
Steven Cameron, pensions director at Aegon, said:
“Gone are the days when reaching state pension age meant a total end to work. Many people are choosing to keep working and earning, even once they’ve started taking their pension.”
Weekly wages in pensioner households increased 30% over the same 20-year period – up from an average of £410 in 1997/98 to £534 in 2018/19.
Working pensioners who are single have seen their weekly wages rise by 71% from £199 to £340 per week over the same period.
Pensioners who continue to work past their state pension age and pay tax on that income are providing a boost to the economy but Aegon warned against complacency.
Cameron added:
“These people are contributing significant amounts to the nation’s finances through the tax they generate, while also helping the broader economy through their work. We’re living in what has been described as a golden era for pensioners, with many benefiting from generous final salary pensions and increases to the state pension.”
He continued:
“When you combine this with earnings from post-retirement work, it’s not surprising that many pensioners are living on very decent incomes. However, these are unlikely to continue so it’s important that society changes with more people able to choose to work past traditional retirement ages.”
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