Fears over Chancellor's 'granny tax' plans
Published on 22 March 2012 12:00 PM
The Chancellor's decision to include a so-called 'granny tax' in his Budget has come under fire from groups representing older people.
During his announcement to the House of Commons on Wednesday, Mr Osborne unveiled plans to scrap age-related tax allowances for older consumers.
According to the Treasury, as many as 4.5 million of the country's older residents might lose out because of the Chancellor's proposals to gradually eliminate the allowances.
From April 2013, new pensioners will not be able to benefit from the allowances. Meanwhile, existing over-65s will see their allowance frozen at £10,500 and the allowance will remain at £10,660 for over-75s.
Sources from the Treasury indicate that the changes could leave existing pensioners £63 worse off on an annual basis. However, Mr Osborne said that older people should not face a cash loss as a result of the measures.
Commenting on the decision, Age UK said it was 'disappointed' by the Budget plans, adding that some older people might lose out on as much as £259 a year because of the reforms.
Speaking on ITV's Daybreak, Mr Osborne said: 'No pensioner loses cash. No one watching this programme is a pensioner who is going to lose any cash as a result.
'They're not going to lose cash, we're going to increase the benefit. At the same time they'll be better off because the basic state pension is going up in a couple of weeks time by over £5 a week.
'No one loses any cash from this Budget.'
Copyright Press Association 2012