You are here: Home - Saving & Banking - News -

Younger pensioners take full force of new tax blow

Written by:

Gordon Browns’ Budget, as well as making the lowest paid worse off with the abolition of the 10p minimum tax band, has meant that pensioners at the lower end of the age spectrum will also be poorer.

He announced that personal tax allowances for pensioners will increase to protect them from the loss of the 10% band, which does not help those who retire early, or women between 60 and 65, because they do not qualify for the higher allowances.

These people will be limited to their basic personal allowance, which is £5,225 for the coming year.

John Whiting, tax partner at PricewaterhouseCoopers, said: “Those who retire in their late 50s and early 60s who do not qualify for a higher personal allowance will lose out.”

And retired financial adviser Peter Stanway said: “The new tax regime is extremely confusing to my mind and people now have to consider their best pension options very carefully.

“The year starting 2008 will double some pensioners’ tax bills, because the abolition of the 10% tax rate will affect pension income but not savings income.”

He concluded: “For a Labour Government to hit the harder off like this is disgraceful to my mind. One of the great inducements to save for a pension was the tax benefit – but if this is effectively withdrawn then all of that was just nonsense.”





Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
It’s the old game as Saga ponders a market float

Saga, the travel and saving and investment services group for mature citizens over 50, is looking at the possibility of a stock...