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News

UK workers pay three times more tax than they save for retirement
By whatinvestment.co.uk
 

The average 50 year old has paid three and a half times more tax in their lifetime than they have saved in their pension pot, according to analysis by life insurance provider MetLife UK.

Total tax paid by the age of 50 is £190,400 on average, which comprises £114,148 income tax and £76,000 national insurance. In comparison, an individual's pension pot is likely to hold around £54,300 at that point.

Dominic Grinstead, managing director at MetLife, commented: 'The amount paid in tax and national insurance by the age of 50 demonstrates the financial pressures and demands experienced by workers in the UK.'

MetLife believes this particular group of people, which they have dubbed 'UGen' for 'Uncertain Generation,' faces a particularly tough time in terms of retirement planning.

Those working on until 66 will pay a further £100,000 in tax during the 16 years between 50 and retirement, making attempts at a final boost to pension pots particularly difficult.

Grinstead advised, 'While the tax bill appears high, the good news is that pension saving at present still attracts significant tax relief and is a good way to maximise tax efficiency while planning for retirement. We would encourage everyone to seek advice to achieve as much certainty as possible about their financial future.

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