Age UK response to Autumn Budget

In response to today’s Autumn Budget - Caroline Abrahams, Charity Director at Age UK said:

On The importance of the Triple Lock & Tax Thresholds.

"The Government’s decision to freeze the income tax personal allowance for a further three years will drag more older people into paying income tax, including some on low and modest incomes who need all the help they can get to sustain a decent standard of living at a time when prices for essentials are constantly rising. The announcement is deeply regrettable for this reason, made worse by the fact it is for a whole three years, even if its impact may in part be offset by the rise in the State Pension as a result of the Triple Lock – a policy that is more important than ever for pensioners now. 

The announcement that the Government will explore ways of ensuring those who receive only the old basic State Pension or the new State Pension do not have to submit a simplified tax return is however a welcome recognition that older people who are digitally excluded and on a low income would be likely to struggle to comply with this process. We are keen to hear more as simply sending older people a tax bill and expecting them to pay up on demand would be unthinkable

Energy

“Energy bills are a huge worry for many older people and so any additional help from the Government is very welcome. However, we note that the decision announced today of reducing energy costs by £150 next April will coincide with the planned abandonment of the Energy Company Obligation (ECO) programme, forcing the Warm Homes Plan to stretch its budget much further than intended. Looking at the overall impact of all these measures in the round leads us to the view that the Government should be doing more to help with energy costs – which will still be higher than when they entered power in 2024.  There was also no more money for the Crisis and Resilience Fund at a time when we're hearing from lots of desperate older people who will be facing another tough winter.

Mansion Tax

“As a charity, Age UK is most concerned about the needs and interest of older people in need and on low and modest incomes. From this perspective we do not oppose the introduction of a Mansion Tax per se, but we will always worry about its impact on older people who are ‘asset rich but income poor’. It’s good that the Government will be consulting on the detail of the Mansion Tax and the needs of this group of pensioners will be the focus of our response. They should have the right to defer paying the Tax during their lifetime. 

Salary Sacrifice

“The changes to the rules on salary sacrifice will, we fear, reduce pension saving among working people and are unwelcome since this will put a decent retirement further out of their reach. Local Age UKs play a vital role in their local communities, providing direct support to older people who often have nowhere else to turn. These small and medium sized charities already face very significant cost challenges because of inflation, and we would have liked to see more support for them announced today. As things are, their financial challenges will increase because of the rise in the level of the National Minimum Wage. The changes to the rules on salary sacrifice could also increase their tax bill yet further while impacting on their ability to support their staff to save into a private pension that will provide them with a reasonable income once they retire.

Cash Isa’s

We welcome the Government’s decision to allow over-65s to retain the £20,000 cash ISA allowance, while reducing it to £12,000 for other groups as appropriate recognition of the particular needs of older savers."