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

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

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 It is now over 6 months old so the content may be out of date.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 Any products featured may be withdrawn by their provider or changed at any time.