Friday, March 08, 2024
Pensioners worse off under the Tories
The Mirror reports on analysis by The Resolution Foundation that has found that pensioners will be clobbered by Tory tax changes with millions of retirees facing an average £1,000 hit to their incomes.
The paper says that economists have warned that older people are the biggest losers from Jeremy Hunt's Budget, with critics hitting out at the "disgraceful £8 billion pensioner tax bombshell" concealed in the small print, They add that analysis has found that the elderly will be left counting the cost of the chancellor's plans to cut National Insurance by 2p from next month in a £10million bid to woo voters and turn around the Tories dire poll ratings:
The Resolution Foundation said that all 8 million pensioners would see their taxes increase by an average of £1,000 by 2027/28 due to frozen income tax thresholds.
Retirees won't benefit from the Chancellor's tax cuts as they are exempt from National Insurance and they are being hit by stealth tax raids on income tax. Income tax thresholds have been frozen since 2021, which means people are being dragged into higher tax brackets by inflation. Older people still pay tax on income above the personal allowance, which includes pensions.
The think tank said pensioners paying the basic rate of income tax will be around £700 worse off by 2027/28, compared to where they would be without the freeze. The average taxpaying pensioner will lose around £1,000. In total, the policy will have hiked taxes for pensioners by around £8billion.
Chief executive Torsten Bell said: "The biggest group of losers are pensioners, who face an £8 billion collective hit. Looking at all policy changes announced this parliament reinforces the sense that the Government has reversed course from the approach that dominated during the 2010s. This time it is those aged over 65 and on the highest incomes who are set to lose most."
Institute for Fiscal Studies (IFS) director Paul Johnson said the elderly would be "substantial net losers" from the changes, as 60% of pensioners now pay income tax.
"Income tax changes will leave most of the £650 a year worse off by 2027 and £3,000 a year worse off if they're higher rate taxpayers," he said. "The Chancellor really has focused the money he's got on people of working age rather than on pensioners."
Liberal Democrat Treasury spokesperson Sarah Olney said: "Buried in the small print of this Budget is a disgraceful £8 billion pensioner tax bombshell. People who have worked hard and done the right thing all their lives are being hammered by Jeremy Hunt with years of unfair tax hikes, leaving them an average of £1,000 worse off each."
No wonder the Tories are continuing to plummet in the polls.
The paper says that economists have warned that older people are the biggest losers from Jeremy Hunt's Budget, with critics hitting out at the "disgraceful £8 billion pensioner tax bombshell" concealed in the small print, They add that analysis has found that the elderly will be left counting the cost of the chancellor's plans to cut National Insurance by 2p from next month in a £10million bid to woo voters and turn around the Tories dire poll ratings:
The Resolution Foundation said that all 8 million pensioners would see their taxes increase by an average of £1,000 by 2027/28 due to frozen income tax thresholds.
Retirees won't benefit from the Chancellor's tax cuts as they are exempt from National Insurance and they are being hit by stealth tax raids on income tax. Income tax thresholds have been frozen since 2021, which means people are being dragged into higher tax brackets by inflation. Older people still pay tax on income above the personal allowance, which includes pensions.
The think tank said pensioners paying the basic rate of income tax will be around £700 worse off by 2027/28, compared to where they would be without the freeze. The average taxpaying pensioner will lose around £1,000. In total, the policy will have hiked taxes for pensioners by around £8billion.
Chief executive Torsten Bell said: "The biggest group of losers are pensioners, who face an £8 billion collective hit. Looking at all policy changes announced this parliament reinforces the sense that the Government has reversed course from the approach that dominated during the 2010s. This time it is those aged over 65 and on the highest incomes who are set to lose most."
Institute for Fiscal Studies (IFS) director Paul Johnson said the elderly would be "substantial net losers" from the changes, as 60% of pensioners now pay income tax.
"Income tax changes will leave most of the £650 a year worse off by 2027 and £3,000 a year worse off if they're higher rate taxpayers," he said. "The Chancellor really has focused the money he's got on people of working age rather than on pensioners."
Liberal Democrat Treasury spokesperson Sarah Olney said: "Buried in the small print of this Budget is a disgraceful £8 billion pensioner tax bombshell. People who have worked hard and done the right thing all their lives are being hammered by Jeremy Hunt with years of unfair tax hikes, leaving them an average of £1,000 worse off each."
No wonder the Tories are continuing to plummet in the polls.
