More and more pensioners face paying tax on their pension income, and even the state pension in the near future – after Chancellor Jeremy Hunt failed to end his six-year freeze to income tax thresholds.
Mr Hunt instead opted to announce another cut to the National Insurance rate in yesterday’s Budget, benefitting 27 million workers but not helping pensioners, who don’t pay the levy.
Retirees have expressed their outrage about the decision, with one person telling GB News: “It was a rubbish budget for pensioners. Why didn't he raise the tax threshold so everyone would pay less tax?
“I still have to pay tax on my small works pension that I worked years to earn but seemed pointless now as I could probably have got Pension Credit if I didn't have it.”
Use our Spring Budget tax calculator to see whether you'll be better or worse off.
Pensioners have criticised Jeremy Hunt's Spring Budget for failing to end the tax threshold freeze
GETTY | PA
Another penned: “Nothing in this budget for pensioners, we will be worse off as many of us fall into a tax bracket so the pension rise in April will be taken up in tax!”
A third wrote: “The insistence of the Chancellor not to increase tax thresholds has meant pensioners now pay tax.
“Ironically, for myself as on a low income (due to be a few hundred pounds over the £12570 this coming year, it has meant that I pay income tax and lose the married couples allowance.
“I wonder how many low earners and other pensioners are affected by this?”
Another called for the personal allowance to be raised from the frozen £12,570 level to a minimum of £18,000.
They added: “Those who have small private pensions don't benefit from any state pension increase.”
A pensioner couple said there was “nothing” in the Budget for them, explaining: “We will be paying more tax from April thanks to pension increase and no rise in tax allowance. We have no car, mortgage, or children, and we do not smoke or drink. I for one will not be voting conservatives in any general election.”
Among his announcements yesterday, Chancellor Jeremy Hunt announced another cut to the National Insurance rate for 27 million workers, which will see the average person save an extra £450, although they will still be exposed to fiscal drag due to frozen income tax thresholds.
Caroline Abrahams, Charity Director at Age UK, branded yesterday’s Budget a "non-event for older people".
She said: "'Was that it?' This Budget was something of a non-event for older people, with very few announcements of much interest or relevance to them.
LATEST DEVELOPMENTS:
WATCH NOW: Robert Buckland MP defends Government's record on pensions
"The reductions in National Insurance (NI) will be welcomed by people in their fifties and early sixties who are in employment but do nothing for anyone working beyond their state pension age because they do not pay NI.
"They can be forgiven for feeling hard done by as a result, especially since many of them are working in their late sixties and beyond not because they want to, but because they simply cannot afford to retire.
"Nor will it help retired people with modest pensions that take them over the tax threshold who will face an increase in income tax rise because personal allowances remain frozen.'
"Age UK had called for the Household Support Fund to be continued beyond April, to help people of all ages struggling on low incomes, and we are pleased the Chancellor announced a six-month extension.
"However, six months is not long enough and, crucially, this leaves older people on low fixed incomes without recourse to this extra help through the winter months, when high energy bills provoke so much hardship and fear."
Conservative MP Robert Buckland yesterday defended the Government's record on pensions, telling GB News: "The triple lock has been the single biggest increase in state pension that we've seen, ever.
"We've done a huge amount for our pensioners, we continue to support them, and I think we can be proud of the record that we've maintained and we've stuck to it, despite pressure to drop the triple lock, that we've heard so many times before."
A DWP spokesperson said: “Our triple lock resulted in the biggest state pension increase in history last year.
“We are delivering a further increase of 8.5 per cent in April, making the basic state pension £3,700 higher than in 2010. This is significantly above inflation which is forecast to fall below the two per cent target in the second quarter of this year, according to the independent OBR.
“We are also curbing inflation to help everyone’s money go further, boosting Pension Credit – worth on average £3,900 a year for pensioners on the lowest incomes – and have made more than 11.9 million Pensioner Cost of Living payments to help with essential costs this winter.”
