Pensioners fear the coalition government plans to freeze their personal allowances, catching more of them in the clawback poverty trap, and accountants predict “impact on people of modest means”.
The Queen’s Speech set out government plans to raise the state retirement age to 66 and restore the link between the basic state pension and earnings inflation but was silent about older people’s personal allowances.
He quotes Norma Hudson, a pensioner in Lincolnshire, as making the point:
“The Lib Dems have made much of their plans to raise the personal allowance for everybody to £10,000 by the end of the current parliament.
“I believe they have also said that such rise will compensate pensioners for the planned extortionate capital gains tax (CGT) hike. But pensioners aged 65 and over already have a personal allowance of £9,490, and those 75 and over have £9,640 – subject to the age allowance clawback.
“So, do the Lib Dems intend to freeze the personal allowances of pensioners for the next four years to bring us in line with everybody else in five years? That would be pretty despicable, since such a freeze – plus the CGT hike – would make pensioners far worse off.”
The article raises points which may affect myself, my wife Natalie, and many pensioners like us. It is well worth a read.