Not one mention of pensioners, who are inching close to a tax trap

The Budget’s generous tax cut for workers was good news. The proposed reforms to ensure more private pensions and ISA funds should invest in British companies can also help revive growth. More older workers – a key group that the Government rightly wants to encourage to keep economically active – may now decide to stay in employment or return to the labour market.

But while these measures are great, a core group of voters will be feeling rather left out. Anyone over state pension age does not pay National Insurance, so the main budget tax cuts will not benefit them at all, even if they are still working. Indeed, there seemed to be no mention of pensioners in the speech at all.

Yes, the Chancellor is right to recognise the importance of ensuring our pension funds invest more in British companies, start-up ventures, infrastructure and housebuilding. This can help boost growth across the economy and provide better investment returns over time. However, pension funds are not pensioners, most of whom are already relying on their past investments or savings, rather than the workers who are still building their retirement funds.

Pensioner groups have understandably expressed disappointment that this important section of the population received no attention, particularly in light of recent evidence showing that the tax burden on pensioners has risen quite significantly since 2010. Pensioners lost the specific tax advantages they had before the 2012 Budget removed special age-related tax allowances. Although these complicated rules did not benefit the highest income pensioners, they meant lower taxes for those in the middle.

The relative tax advantage for pensioners has now been virtually eliminated anyway by the much higher personal tax threshold, but shouldn’t the optics of a big tax cut only for non-pensioners have been addressed in an election year?

Raising the personal tax allowance would have benefited millions of pensioners. Indeed, it is worrying that the freeze in this allowance, coupled with rising pensions as earnings and inflation have increased sharply, have left the full new state pension perilously close to the tax threshold.

Around seven million pensioners are already paying tax, but bringing millions more into the tax net would create significant risks. Especially for those who, throughout their working life, never had to fill in a tax return and may suddenly need to. It would be dreadful to see them face fines for failing to pay small amounts of tax that they did not even realise was due. Consideration needs to be given to this urgently.

Pensioners are a valuable part of our society, who have worked hard to build our country and contributed so much to its past successes. Many of them worked for years, going through tough times, but benefiting the economy and society with their dedication and skills. They also contribute so much to our hidden army of volunteers, unpaid carers and charity workers.

There has been progress in supporting these people under Conservative governments. The state pension triple lock has boosted its value; pensioner poverty has fallen, and more pensioners have been able to keep working.

But more can and should be done. These core Conservative voters should not be left out.