Wednesday, March 21, 2012

Osborne hits the soon to retire who have saved!

Being born about 60 to 64 years ago in Britain really was a bad idea. Things started well enough, you missed the bulge and class sizes in state school were thus falling from the high forties to lower levels, you could later rightly argue you were not a real baby boomer, as that ghastly phrase caught on to brilliantly reflect that age group's tastes and habits, but lately things have been not so good.

The completely barmy Brown took a cleaver to your pension funds and what is now left on anything you may have saved through a lifetime's work will, after the credit crunched stockmarket crash, actually payout remarkablly little in cash, especially when compared to all those wild high estimates you received once a year while you struggled to maintain the insurance payments.

Worse comes when you see the ludicrously small annuity yields that your depleted pension fund cheque will actually now buy.

George Osborne, just out of short trousers knows nothing of this, for this afternoon he has added yet more misery on this penalised group, whom he has repeatedly hit in his earlier budgets, with stepped rises in the age they must reach to ever gain a state old age pension.

Now for those who saved and thought they were at least to get the extra age related income tax allowance of £2,450 at 65 and £2,615 at 75 years (this years figures) comes an extra blow. Any born after April 1948 will from today get nothing!

This change the Treasury smugly estimates should yield an extra billion pounds in taxation according to the BBC, or put in other words an extra billion pounds will be removed from elderly taxpayers pockets and destined straight for the pockets of Cabinet Ministers and MPs, all of whom will benefit from their own increased allowances and the former group certainly even more from the lowering of the top income tax rate.

Hitting the elderly, that's the ticket George, kill em off before the next election eh?

UPDATE 22nd March midday - The Taxpayers Alliance has now done a review of the budget and it confirms my comments above. Their full report is linked here while the point I made is confirmed as follows:

Those turning 65 in 2013-14 or later
Those born on 6 April 1948 or later won’t get an age-related personal allowance. In 2013-14, they will get the same personal allowance as everybody else – £9,205 – instead of £10,500 if they had been born earlier. That implies they will get £1,295 less in personal allowance than they would under the current rules, which means they are about £259 worse off at the basic rate of tax.

There is a very useful BBC News Q&A report on this change which is linked here.



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