What you should do NOW to protect retirement wealth

THIS Budget was never going to rekindle the nation’s love for a Government that put us through taxation hell to get the economy through Covid – and the financial mayhem of Liz Truss’s disastrous premiership.

It didn’t, although Chancellor Jeremy Hunt was on rather good form as he laid a path towards lower taxes – about time, too, I hear you say – in between goading Angela ‘two homes’ Rayner, Labour’s Deputy Leader.

Yet I am sure the nation’s near 13million pensioners felt a little aggrieved about falling through the Budget’s cracks. Indeed, they hardly got a mention.

Instead, Mr Hunt chose to focus on helping families and those in work. Understandable to a degree, but a dangerous tactic, given the propensity of many pensioners to vote blue rather than red.

Of course, beholden (bizarrely) to the flawed number- crunchers at the Office for Budget Responsibility, Mr Hunt was never ever going to be able to blow us all away with a fanfare of tax cuts.

But what he did offer up – a further 2p cut in National Insurance (NI) contribution rates to add to the 2p reduction announced in last year’s Autumn Statement – was divisive and alienating.

In opting for NI cuts rather than a reduction in income tax, he excluded those pensioners in receipt of the state pension from his largesse.

As pensioners have kept reminding me since November when Mr Hunt announced wave one of the NI reductions, those who get a state pension don’t pay NI. But many of them – indeed, more than ever because of his multi-billionpound stealth tax raid – pay income tax.

Maybe Mr Hunt will put this ‘wrong’ right later this year if the Government, as widely reported, holds another ‘fiscal event’ ahead of an autumn election.

But then, maybe, he won’t – some politicians and commentators are even suggesting a snap May election with a promise to cut income tax rates enshrined in the Conservative Party’s manifesto. The biggest scourge for pensioners is Mr Hunt’s freezing of the personal allowance at £12,570 until 2028. As their incomes have risen above this amount, more have been dragged into paying income tax. The number who pay this is set to hit a record 8.5million this year, up from 4.5million in 2010.

For many, the financial outlook is tough, but it’s not all doom and gloom.

On the bright side, inflation is heading down below 2 per cent.

Also, an extension of the fuel-duty freeze for another year will help elderly drivers mitigate inflation-busting rises in insurance premiums.

Furthermore, there are steps pensioners can take themselves to safeguard their finances and wealth.

These include shopping around as a matter of course for services such as broadband, insurance, mobile phone contracts and best savings deals. Too many pensioners remain loyal to companies that have long stopped providing them with value for money. LOYALTY DOES

NOT PAY. Also, far too many pensioners on low incomes do not claim benefits that can help buoy their household finances – for example, pension credit. Don’t be shy or embarrassed, log into https://www.gov. uk/pension-credit/eligibility to see if you are eligible and claim it.

Finally, ensure any cash savings or investments you have are fully protected from income tax and capital gains tax. That means shielding them inside taxfriendly Isas.

DURING this tax year – ending on April 5 – you can put up to £20,000 into an Isa, and the same again come April 6 (£5,000 more if the new British Isa is up and running in time). The money then grows free of tax – and can be withdrawn without incurring tax.

It could be argued that pensioners had already been treated quite royally by Mr Hunt. Next month, under the triple-lock promise, the state pension will rise by a thumping 8.5 per cent to £11,501 per annum – ahead of inflation currently running at around 4 per cent.

Brilliant, yes, although let’s not get too carried away. Only around half a million pensioners get the full ‘ new’ state pension while those who became eligible before 2016 get an inferior ‘basic’ deal.

Also, let’s not forget that it was pensioners who had the triple lock guarantee taken away from them in 2022.