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Is the criticism levied at ‘Granny tax’ justified?

"Firstly, there was good news – the basic state pension will increase by £5.30 a week from 6 April.  Then the Chancellor announced a controversial change to age-related personal allowances – the amount of income that is tax-free. He will freeze the personal allowance for existing pensioners from April 2013, until it is aligned with the general allowance which everyone else receives but significantly, this change will only affect less than half of all pensioners as they do not receive enough income to reach the threshold. HM Revenue & Customs admits that by April 2014, 4.4 million people will be worse off in real terms with an average loss of £83 per year. The government will also introduce a new single-tier state pension for future pensioners to be set at about £140 and based on contributions.

"This so called ‘granny tax’ has evoked criticism and great debate. However, we think that it is only right that older people who work should be taxed in the same way as younger people – particularly as so many more people will be working in later life. Additionally, the Chancellor isn’t really taking anything away from older people – he is freezing an allowance and this means that people will get less than they expected however, the same can be said for most of us when it comes to our pensions.  More worrying is the fact that babies born today are likely to have to work until they are 80 before they receive any state pension!

"It is all too easy to be negative and forget the many benefits that older people currently have  – freedom passes, free prescriptions and winter fuel allowances. Until now the elderly have been shielded from many of the cuts that have affected working families. We must not forget that we are still in the midst of a global financial crisis and no group can expect immunity from the fall out.

"On another note, we were very disappointed to see very little in the budget to boost the struggling UK property market and support growing private rental sector. Whilst the government will introduce 7% on duty on £2 million pound properties announcements, this will only affect less than 0.5% of homes. And, there were no measures announced to support the UK’s growing private rental sector either. This was a shame."

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