Pensioners hit by new stealth tax
Pensioners are to face a new stealth tax. They will now have to pay tax on contributions to PMI offered as part of their retirement package.
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.