The Chancellor of the Exchequer yesterday announced sweeping changes to the personal tax allowances given to pensioners over the age of 65.
This has caused great uproar in the media and across the UK that a benefit first introduced in the 1920s by Winston Churchill is to be frozen then phased out altogether. The change in age-related personal allowances – the amount of income that is tax-free – will save the government £1bn by 2015.
The BBC reports:
“To Chancellor George Osborne it is a simplification in a complex tax system. To its critics, it is a “granny tax”. But what exactly does the most controversial measure in Wednesday’s Budget mean for you?”
You can see for yourself how this may affect you personally here at the BBC website
The Chancellor is saying that no one will actually lose cash because of the changes. But many see that the changes will leave pensioners’ future incomes exposed to more tax in the coming years.Also it is argued the retirement tax planning of people not yet of retirement age will be affected.