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Older Brits are set to be the major losers of the recently announced 2012 budget. How will the so-called ‘granny tax’ affect British elderly?
British pensioners will be one of the worst hit by the new budget. From April 5 2013, UK retirees will have to pay the same tax as any other worker, as George Osborne announced that the Government will remove the higher tax-free allowance that older Brits currently have.
Those changes will particularly affect British people aged over 65 with an income between £10,500 and £28,930. Out of the total of 11 million pensioners that live in the UK these days, that group currently represents up to 4.4 million people.
From April next year onwards, Brits fitting into these conditions will get a tax allowance of £9,205 – same as any other worker-, instead of the current higher allowance of £10,500.
Pessimistic financial prospects for 2013
The 2012 budget announcement drew a black picture in the financial future of many British pensioners.
Additionally, a recent research from retirement specialist LV= revealed that the cost of living increased by 33% for today’s pensioners. This means that retirees are the social group affected the most amid the current economic situation.
Further figures from that report showed that a retired couple spends an average of £17,922 per year, while a single pensioner spends £9,917 – £190 a week.
Once those figures are contrasted with the average state pension income of £102.15 a week that retirees receive nowadays, it comes clear that British pensioners are exceeding their pension average amount by 87% -£88.55 a week.
This reality, together with the future removal of the higher tax allowance, is forecasted to make the British elderly struggle more than any other social group in the UK. Many old people fail to plan effectively for elderly support and struggle with expenses such as getting a stairlift for the elderly.
Price hikes in every day products, higher tax rates and frozen income are set to leave many of them on the breadline.