Granny tax hits 5 million pensioners

[Gromit]

We're all in this together. I bet when those words were firsted uttered by smiley Dave no one thought he was going to rob the poor pensioners to give a tax cut to the highest paid earners.

http://www.telegraph....llion-pensioners.html

Have they just lost 5 million votes?, or do pensioners accept that paying off the deficit will be better In the long run and will continue to vote for them?

[factor-fiction]

I have never understood the logic behind an 'age allowance' giving higher tax allowances for pensioners relative to non-pensioners. Maybe someone knows the rationale. I'd rather see a higher state pension and less reliance on 'means tested pension credit, 'winter fuel payments' and 'age allowances'
The problem with giving special allowances such as 'age allowances' is that any attempt to reduce/freeze them is met with claims of 'robbery' when it may in fact be simply correcting an anomoly.

[mike11111]

I agree with Factor, could never see the logic. VAT is the same for all regardless of age so why shouldn't income tax be? I'm 63, by the way, one of those who will just miss out, but I'm not complaining. The way I look at it is that everyone will now enjoy the advantages that pensioners currently have. It seems that some people are more concerned with maintaining differentials than anything else, and look what industrial strife that attitude caused in the 60s and 70s.

[Hopkirk]

At last, someone is talking sense.

Well done Factor.

And well done to the coalition for simplifying pensions and benefits - far too complicated for anyone to understand in the past.

[DTCwordfan]

And thats whats being planned, factor.

No cash out, just that the inflation will not be applied, the inflation rate falling pretty quickly at the moment...something that the Labour petrol-throwers are not mentioning - and then the focus on (i) the pension (ii) increasing the overall tax allowance. My bet is that next year, we will see £10,200 that closes the gap and possibly even higher if the taxes come in, inflation remains on the way down and economic growth recovering, possibly £10800.

Let's also cut the hype too - it's the wealthy end (10%) of pensioners that gets affected most, for 40% the allowance level will have very little or zero effect.

Also the 45 p - never mind the economics of all the money shifts to avoid the tax, one of the hidden gems that Osbourne has stitched in is a closure of all the wealthy tax loops and they very rich will have to be stump up at least 25% average, driving the wealthy tax take in absolute pounds significantly upwards....and if they or their accountants try any new monkey games, he reserves the right for retrogressive legislation.

Before shooting these sort of statements off, Gromit, it helps to understand the fine print.

[New Judge]

Yes, all credit to them Hopkirk.

Even more credit if they garnished it a little by making the new arrangements available to all pensioners. As I said in my answer to the earlier question, from April 2013 we will have pensioners living under at least three different financial regimes:

- Those reaching State pension age before 2009 needed 39 years (women) or 44 years (men) NI contributions to get a full pension. Those reaching retirement age since then need only 30 years.

- From next year those reaching 65 after April will have their personal allowance restricted at £9,205. Those reaching 65 before then will have an allowance of £10,500.

- From 2015 (estimated) a new single rate pension of £140 (estimated) will be paid to all new pensioners. Existing pensioners will be stuck at the old, inferior rate.

So all credit to them for trying to simplify the tax and pension affairs of the nation’s older people. Unfortunately the latest offering does nothing of the sort. All it has done is to create yet another group of people being treated less favourably than others.

And yes, DT, it does pay to read the fine print. The lack of indexing of the age-related allowance is small beer. It is the removal of it from those reaching age 65 after April 2013 that is the issue. Better the government simply said that they are introducing the measure to screw an extra £1bn revenue from older people. If they wanted to simply allow the normal personal allowance to catch up with the accelerated age related allowance (their version of “simplification) there was no need to withdraw the allowance from those reaching 65 after next April.

[grffindoor2011]

There has never been a budget under any government that was welcomed by everyone. The main aim of a budget is to raise capital. One year the pensioners will be worse off and another it will be middle England. If everyone was given £100, the opposition would argue the government were throwing away money. If it were given to the needy, middle England would be moaning that the scroungers were getting something for nothing.

Someone said to me they were pleased cigarettes have gone up so much. The reality is that more smokers will stop and the government will have to find an alternate tax from you and I.

As for the pensioners. The vision of some 88 year old spinster called Mary living in a squat with a value tesco heater that gets turned on once a month to heat her tin of beans may sound like a BAFTA tearjerker. The truth is that most pensioners have never had it so good. Many pensioners get reasonable company pensions along with their state pension. They aren't all living in the woods waiting for red riding hood to appear with this weeks apple pie.

[d9f1c7]

Were as I agree with the premise here, politifcally, I can't help thinking the governement has dropped a fairly major b0lluck with this one and alienated millions of voters, many of which are natural Tory voters. Red Ed must be rubbing his hands in glee!