Pensioners spend almost a fifth of their income on indirect taxes, research has found.
This works out at around £4,100 for every retired household, or a combined total of £29 billion a year.
That is according to MetLife analysis of Office for National Statistics data, which looked at how retirees' income is affected by spending on VAT, duty on alcohol and tobacco, fuel duty and taxes on betting and insurance premiums.
VAT was the biggest contributor to the tax on spending with the average retired household contributing £1,865 in VAT a year, equivalent to around 8% of the average retired household's income," according to MetLife.
Fuel duty costs on average £262, while alcohol duty accounted for £242 a year.
The research suggested tax on spending was a bigger burden for the less well-off, with the poorest retired households losing almost a third of their income as a result, compared with 14% for the richest.
Dominic Grinstead of MetLife UK said: "Retiring from work unfortunately doesn't mean retiring from paying tax, VAT and other indirect taxes on spending which take a major bite out of retired households' incomes.
"The launch of pension freedoms has highlighted the issue of tax as many people rush to take their pension funds in full, risking unnecessary bills and providing further revenue for the Government.
"People need certainty over income in retirement so that they can plan ahead and that should include looking at products which can provide a guaranteed income."
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