Pensioners overall faired well in the budget. Personal Allowances Increases 65-74 Allowance: 2003/04 £6,610 (2002/2003 £6,100)75+ Allowance: 2003/04 £6,720 (2002/2003 £6,370)
Our view:
These increases are well in excess of current inflation and great news for pensioners when you consider that the rest of the country has had Tax (allowances frozen) and National Insurance increases. Pensions Credit Pensioners have been previously penalised for having private pensions and other income and assets over £12,000 when it came to the Minimum income Guarantee. In simple terms it was means tested. If you had greater income or indeed assets above £12,000 you were penalised. This was a disincentive for all to save. The Chancellor has abolished the £12,000 asset test and replaced it with another test where the first £6,000 in assets are not included but a % assets above are. However, this is not taken into account for income up to £139 per week for a single pensioner and £203 per week for a couple.
This is good news for all pensioners in that part of your additional income or assets will not be taken into account. However, we still believe that he has not gone far enough. People will still be put off by the complex paperwork (even though they have tried to simplify it) and people on greater pension incomes who have bothered to save for their retirement when many have not bothered will still be penalised for doing so. Winter Fuel Payments For those over 80, winter fuel payments will increase from £200 to £300. Our view: Great news for the elderly!