Pensioners hit by new stealth tax

By Naomi Caine Jun 08, 2006

Print this article

Another week, another stealth tax – this time it’s a blow to the elderly.

Hundreds of thousands of pensioners who get private medical insurance from their previous employer as part of their retirement package will now have to pay tax on the contributions. So, if you are a higher-rate taxpayer and your former employer pays £1,000 for your PMI cover, you can look forward to a £400 tax bill, says Clare Francis in The Sunday Times.

The tax seems particularly harsh as elderly people are more likely to want PMI as they are more likely to claim. But they are also more likely to struggle to afford the premiums, which rise with age. This government policy might backfire – pensioners unable to afford to pay for their cover might well fall back on the NHS.

Published in Personal finance | More articles by Naomi Caine

Share with:More

TwitterLinkedInViadeoFacebookYahoo! BuzzredditDiggDelicious

Related articles

FREE - MoneyWeek's latest money-saving tipsRuth Jackson

For no-nonsense, practical advice on saving money and managing your finances, sign up now to our free weekly email, MoneyWeek Saver. Written by personal finance expert Ruth Jackson, these tips could save you hundreds, even thousands, of pounds!
Sign up FREE to MoneyWeek Saver here.