Pensioners could get an unexpected tax sting - Money - News - Moneyfacts


Pensioners could get an unexpected tax sting

Pensioners could get an unexpected tax sting

Category: Money

Updated: 21/09/2011
First Published: 20/09/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Pensioners who started taking their state pension for the first time in 2010/11 could find themselves stung by an unexpected tax bill.

The Consumer Credit Counselling Service (CCCS) says that notices are currently being sent out by HM Revenue & Customs to an estimated 1.2 million people who paid too little tax last year.

The shortfall has been caused by errors in the Pay-As-You-Earn system.

Experts predict that of the 1.2 million people who will be hit with a tax bill, some 160,000 pensioners could face repayments of up to, or even more than, £1,000 each.

The charity has warned that the slap of a hefty bill on some of the UK 's vulnerable pensioners could push them into further financial difficulty.

Older people contacting the CCCS who reached pension retirement age during 2010 owed an average of £21,370 in unsecured debt, and had an average of just £85 left over after meeting basic living expenses each month.

"With so little available at the end of each month as it is, these unexpected tax bills could have a serious impact on the ability of some pensioners to repay their debts," said Delroy Corinaldi, director of external affairs at the charity.

"Pensioners who receive a repayment notice should not panic, however, as help is on hand.

"Anyone who is concerned over the impact that repayments will have on their finances can contact HMRC to discuss their situation - and anyone struggling to cope with their debts can always contact a debt charity such as CCCS for free and impartial advice and support."

Find the best financial information for you -Compare Financial Solutions

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Give your finances a pre-Christmas health check

The festive season is rapidly approaching, and with it comes thoughts of how you’re going to fund the whole thing. It’s important to be on the ball, and giving your finances a pre-Christmas health check could be one of the best things you do.

Parents to spend £552 on children this half term

Autumn has truly arrived – and half term with it. This looks to be bad news for parents’ wallets, as research from American Express shows they will be spending an average of £276 per child this holiday break.

Are you still funding your children’s lifestyle?

While many parents like to provide financial support to their children while they grow up, often helping out with things like weddings, cars and university fees, others find that they fund more of their children’s lifestyle than they’d like.