Granny Tax- Budget 2012

March 22, 2012 at 12:56 pm | Posted in Uncategorized | Leave a comment
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I’m sure that the details of yesterday’s budget will be the topic of many conversations today especially amongst the elderly who appear to have been hit hard by George Osbourne’s Budget 2012.

The Chancellor has introduced a “Granny Tax” which is set to affect 4.5 million pensioners as he plans to phase out the age related allowances which were introduced by Winston Churchill in 1925.

George Osbourne Chancellor

The Chancellor- George Osbourne

Pensions aged 65 plus are currently not taxed on the first £10,500 of their income and for those aged 75 plus this amount is £10,660. This has now been frozen meaning that pensioners will lose an average of £63 annually.

However, new pensioners will be hit worse off as the age related allowance will be withdrawn completely by April of next year meaning that they will lose out on £197 yearly.

pensioners

Granny Tax will affect half of all pensioners

The Chancellor defended these cuts, which are set to have an impact on half of all pensioners, by stating that Granny Tax would raise an estimated £3 billion and simplify the system. Adding that state pension would be increased by £5 in coming weeks, a welcomed bonus for all pensioners.

Regardless of such Granny Tax has become a point of anger amongst many older people and aging organisations that think it is an unfair move by the government and I agree. As phasing out age related tax relief for elderly people appears to be incredibly harsh. Surely we should be taking care of our aging pensioners rather than burdening them with even tighter budgets.

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