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MSE News: Budget 2012 - £3.3 billion tax blow for pensioners

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MSE News: Budget 2012 - £3.3 billion tax blow for pensioners

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Former_MSE_HelenFormer_MSE_Helen
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This is the discussion thread for the following MSE News Story:

"Pensioners received a £3.3 billion blow in today's Budget as they will eventually lose the higher personal allowance they enjoy in comparison to the rest of the population. They will eventually pay the same tax as everyone else rather than enjoying their current lower payments."

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Replies

  • Does this change also mean the end of part of the allowance being reduced when income exceeds roughly £25,000 in retirement? If so surely this is a tax reduction for anyone earning just above this figure?
  • molleymolley Forumite
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    When the £10,000 Tax Allowance was first mooted I asked myself why nothing was said about the differential for over 65's being increased pro-rata and now I know why ....Looks like it's going to gradually disappear until under 65's and over 65's will be on the same allowance ....no prizes for guessing who loses out .
  • Must admit I never really understood why older folk received a larger allowance; they already avoid national insurance (for now!) and, if anything, require a lower income than younger people. Having one simple 'personal allowance' for everyone (and at a much higher level for the majority ie £10,000) does generally make sense imho.
  • molleymolley Forumite
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    Must admit I never really understood why older folk received a larger allowance; they already avoid national insurance (for now!) and, if anything, require a lower income than younger people. Having one simple 'personal allowance' for everyone (and at a much higher level for the majority ie £10,000) does generally make sense imho.

    Of course they don't pay NI...they have paid it all their working life . And what makes you think "older folk" as you call us require a lower income ?? The whole idea of retirement is having the time and income to be able to do things which is why this ever creeping retirement age/State Pension age is so abhorrent .
  • typistretiredtypistretired Forumite
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    Must admit I never really understood why older folk received a larger allowance; they already avoid national insurance (for now!) and, if anything, require a lower income than younger people. Having one simple 'personal allowance' for everyone (and at a much higher level for the majority ie £10,000) does generally make sense imho.

    Are you trying to goad us pensioners. As someone who paid contributions for over 40 years (not the 30 which is required now) and helps the economy by looking after 3 grandchildren free of charge to enable my children to work full time (and they pay high taxes etc) I find your comment very offensive :mad:
    "Look after your pennies and your pounds will look after themselves"
  • molleymolley Forumite
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    Are you trying to goad us pensioners. As someone who paid contributions for over 40 years (not the 30 which is required now) and helps the economy by looking after 3 grandchildren free of charge to enable my children to work full time (and they pay high taxes etc) I find your comment very offensive :mad:

    Go on typistretired .. You tell him/her !!!
  • Oh I didn't mean for it to be offensive; we all have our crosses to bear, of course but I just generally agree with things being simplified as much as possible. I read recently that the average life span in 1912 was 52 years so it could be worse (and timing is everything).

    Regards downshifter98 (a he)
  • Dave_C_2Dave_C_2 Forumite
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    What some people don't realise is that us Pensioners don't have the option of changing jobs to boost income. There is no option of going to your boss and asking for a pay rise. Once we are on a pension that's it for the rest of our lives.
    OK private pensions should rise in line with inflation, though that figure is usually at the lower rate of inflation (CPI?) capped about 3-5%.
    With state pensions we rely on the government of the day to provide the inflation-proof element and possible "pay rises" (as if). The this freeze on age related allowances is basically a year on year (not one-off) pay cut until the personal allowance rises to match

    I think Osborn has just lost the Tories the grey vote.

    The rise to £107.45 had already been announced and re-iterating the rise as part of this budget is cheating.

    Dave
  • SandraScarlettSandraScarlett Forumite
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    Does this change also mean the end of part of the allowance being reduced when income exceeds roughly £25,000 in retirement? If so surely this is a tax reduction for anyone earning just above this figure?

    Yes, my neighbour asked me that this afternoon. Apparently, he loses £1 of allowance for every £2 he receives over £24,000 (his private pension and State Pension) and wondered if that has been scrapped.

    And before anyone thinks he's "lucky", he worked from 14 to 65 in the same engineering job, and paid into his private pension for yonks.

    xx
  • wakeupalarmwakeupalarm Forumite
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    Does this change also mean the end of part of the allowance being reduced when income exceeds roughly £25,000 in retirement? If so surely this is a tax reduction for anyone earning just above this figure?

    Bad new for those about to retire after April 2013 but good news for pensioners with incomes over £24000. Even if they don't scrap the claw back it still only reduces to the now much higher personal allowance. This will mean a tax saving for those pensioners above £24000. Even better benefits if they do scrap the claw back.

    A budget for Millionairs and high earning pensioners and couples with children earning less then £120,000 combined.
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