TORIES ARE PINCHING PENSIONS
Starmer: Hunt & co ‘learned nothing’ from Truss disaster
PENSIONERS will be clobbered by Tory tax changes, with millions of retirees facing an average £1000 hit to their incomes, analysis shows.
Economists warned that older people were the biggest losers from Jeremy Hunt’s Budget, with critics hitting out at the “disgraceful £8billion pensioner tax bombshell” concealed in the small print.
The Chancellor is cutting National Insurance by 2p from next month in a £10million bid to woo voters and turn around the Tories’ dire poll ratings.
But analysis yesterday found the elderly will be left counting the cost of the plans.
The Resolution Foundation, a think tank which focuses on living standards, said all eight million pensioners would see taxes increase by an average of £1000 by 2027-28 due to frozen income tax thresholds.
Retirees won’t benefit from the Chancellor’s tax cuts as they are exempt from National Insurance and they are being hit by stealth tax raids.
Income tax thresholds have been frozen since 2021, which means people are being dragged into higher tax brackets by inflation.
Older people still pay tax on income above the personal allowance, which includes pensions.
Labour leader Keir Starmer accused ministers of having learned “absolutely nothing” since Liz Truss’s disastrous mini-Budget, where she triggered an economic meltdown with a £45billion package of unfunded tax cuts.
Starmer said the Tories had made a “staggering” £46billion unfunded commitment to abolish National Insurance. “That’s bigger than Liz Truss’s commitment, so they’ve learned absolutely nothing,” he said.
Resolution Foundation chief executive Torsten Bell said pensioners paying the basic rate of income tax will be about £700 worse off by 2027-28, compared with where they would be without the freeze.
The average taxpaying pensioner will lose about £1000. In total, the policy will have hiked taxes for pensioners by around £8billion.
Bell said: “Looking at all policy changes announced this parliament reinforces the sense that the Government has reversed course from the approach that dominated during the 2010s. This time it is those aged over 65 and on the highest incomes who are set to lose most.”
Dennis Reed, director of the Silver Voices campaign group, said: “Older people, including those who have previously voted Tory, are hopping mad about this.”
Meanwhile, real disposable income is on course to fall by 0.9 per cent, which makes this the first Parliament in modern history to oversee a fall in living standards.
Research found it will take until 2026 for real average wages to go back to 2008 levels – which has been dubbed a “staggering near two lost decades of pay growth”.
Experts claim if pay had risen at the level it did before the financial crisis, the average worker in 2023 would have been £14,000 better off.