Pensioners miss out as Hunt targets his cuts on the young
PENSIONERS have been left out of the Chancellor’s round of tax cuts for a second time in six months after the Government snubbed its core voting base ahead of the General Election.
Eight million pensioners who already face average tax rises of £960 as a result of the Government’s stealth freezes on tax thresholds were left empty-handed in the giveaways announced yesterday.
Jeremy Hunt’s 2p cut in National Insurance will see more than 12.6million pensioners who do not pay the levy missing
out on £450 of personal taxation giveaways for a second time in two months.
That is despite the fact that pensioners who draw income from their private and workplace pensions are paying more tax than previous retired generations as a result of stealth taxes.
Personal taxes will rise by a net £20billion a year by 2029, despite the recent round of cuts, the Resolution Foundation think-tank says.
Torsten Bell, its chief executive, said: ‘The biggest choice Jeremy Hunt made was to cut taxes for younger workers while allowing taxes to rise for eight million pensioners – a staggering reversal of the approach taken by Conservative governments since 2010.’
Retirees are disproportionately likely to vote Conservative. In the last election, 67 per cent of over
70s voted Tory, compared with 21 per cent of those aged 18 to 24.
Although many pensioners will have been disappointed by the Budget, they will get a bumper
increase in the state pension next month as it rises by 8.5 per cent – approximately £900 a year on the new state pension – under the triple lock policy.
Yesterday, the Chancellor pledged to uphold the triple lock, which ensures payments rise by the highest of inflation, earnings
growth or 2.5 per cent. However, Dean Butler, of the pension group Standard Life, said a freeze on the personal allowance meant the state pension would account for 92 per cent of pensioners’ tax-free allowance versus 70 per cent five years ago.
As a result, many will have to
pay income tax for the first time. According to grandmother- ofthree, Yvonne Bailey, 78, the Budget was ‘a load of rubbish’.
She said: ‘They’ve done nothing to help people at the lower end of the spectrum. For pensioners, it means nothing.’
She receives £270 a week, and
says she can only afford to heat her Oxfordshire bungalow for an hour a day – and meat and fish are beyond her means.
She added: ‘I’ve worked since I was 16 and I thought I’d be able to enjoy myself in retirement. But they don’t think about the people at the bottom.’