Granny Tax Budget Hit
Published / Last Updated on 21/03/2012
Granny Tax Budget Hit.
The government has come under fire for plans to change tax allowances for pensioners. George Osborne is to freeze tax allowances for anyone over the age of 65 earning at least £10,500 a year, and scrap the relief entirely for those retiring from April 2013.
According to the Chancellor, by freezing the allowance at 2012/13 levels, would not leave pensioners worse off in cash terms. It is expected to save £1bn a year by 2015.
Labour are calling it a hidden tax rise which would affect millions, as the allowances would not be increased in line with inflation. It is estimated it would leave more than 4.4 million people worse off by an average of £83 a year in 2013/14 and for people due to turn 65 after 5 April 2013, they could lose up to £322 annually.