28 February 2008
Pensioners will lose out from April when the Government
abolishes the 10p income tax starting rate at the same time as
cutting basic rate tax from 22% to 20%. Women who retire at 60 but
who may not get higher pensioner's tax allowance until they reach
age 65 will be particularly hard hit.
A pensioner under 65 who receives £10,000 a year who is
not entitled to any other benefits would currently pay £783
in income tax. This will rise to £913 in April, leaving them
£130 a year worse off.
However, pensioners over the age of 65 may be protected from the
changes (depending on their own income tax situation), because the
Government is increasing its Personal Allowance from £7,550
to £9,030.
Commenting on the tax changes, a Treasury spokesman said: "There
are people who will be marginally worse off because of these tax
changes. But it needs to be seen in context. We have spent
£11 billion more in real terms on pensioners this year than
when we came to power and from April the average pensioner will be
£28 better off."
