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MPs may debate ‘granny tax’

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MPs may be forced to debate a controversial plan to halt age-related tax allowances – a move dubbed a ‘granny tax’ – after an online petition opposing it garnered almost 100,000 signatures.

In last year’s Budget, the government announced that the amount of income that is not taxed will be frozen for those aged over 65 while, from April 2013, those hitting 65 will no longer receive a larger personal allowance than people of working age.

But many pensioner groups have criticised the plans, saying they will hit pensioners with modest amounts of savings the most.

An e-petition opposing the plan has attracted almost 92,000 signatures. Should 100,000 people sign the appeal, the issue will be considered for debate by the Backbench Business Committee.

The petition states: “We consider that at a time when pensioners are struggling to make ends meet and yet are a group of people due to age, health etc who often have extremely limited opportunity to make good lost income, this reduction in allowances is grossly unfair.”

Budget 2012 documents suggested the move would save the government £1bn by 2015.

The petition closes on 22 March.