Last updated at 14:22, Thursday, 22 March 2012

George Osborne has been accused of an “outrageous stealth tax” on middle earning pensioners as he cut taxes for Britain’s wealthiest in yesterday’s Budget.

Grateful: Willie Whalen

The Chancellor acknowledged that 4.5 million pensioners would lose out as a result of a decision to phase out their additional age-related allowances.

Under the plans, personal allowances – the amount someone can earn before tax kicks in – will be withdrawn for new pensioners from April next year.

That means that while existing pensioners will have their allowances frozen at £10,500, new pensioners will only get an allowance of £9,205 – in line with people of working age. About half of pensioners will be affected by the changes, which will raise around £1bn a year.

The average loss for pensioners has been put at £80 a year, rising to £197 for those retiring from next April.

The changes were announced in the same package of measures that saw the top rate of Income Tax, paid only by the wealthiest in Britain, cut from 50p in the pound to 45p.

William Whalen, a Labour councillor in Carlisle and a veteran pensioners’ rights campaigner, branded the phasing out of the pensioners’ age allowance “a disgrace”.

He said: “This granny tax is paying for the cut in the 50p tax rate for the rich – the money has to come from somewhere. Pensioners have lost out big style. They have to work longer before they get a pension and now, when they do retire, they are being stripped of the benefits.

“It’s a disgrace that pensioners are subsidising the rich.”

A statement from the Treasury said: “We are taking a decision that the best way to help pensioners is through the triple lock, guaranteeing increases in the state pension. There is a goal of a simpler tax system and a simpler personal allowance system.”

First published at 11:29, Thursday, 22 March 2012
Published by http://www.newsandstar.co.uk