Last updated at 14:26, Thursday, 05 April 2012

If you were born in the second half of 1948 and plan to retire next year, you’re in for an expensive shock. Chancellor George Osborne announced in the Budget that age-related allowances – the amount of income a new pensioner can receive before paying income tax – will drop from £10,500 to £8,105.

It brings new pensioners into line with those in work and was spun by the Government as a simplification of the tax system. It has been predicted that the changes made by Mr Osborne will save the government £1bn by 2015.

Critics have not seen it that way though and quickly labelled it the “Granny Tax”. The move has angered many and led to a political kicking for Mr Osborne.

Malcolm Jones, of Brook Street, Carlisle, got a nasty surprise when the Chancellor announced the measure a fortnight ago.

He turns 65 next year and will start receiving the state pension on top of his public sector pension built up during his career as an education specialist with the London Borough of Greenwich.

Fortunately for Malcolm, the measure does not kick in until April and as a January baby he is not affected.

“It was a shock when it was announced and quite disgraceful really because we hadn’t been forewarned at all,” he said.

“It was dressed up as a simplification and presented as some great victory for pensioners when actually they are taking money off people.

“After the initial shock, I investigated it and found out it does not affect me, but if I’d have been born four months later I would have been.

“That just shows the arbitrary nature of it – some of the people I went to school with will get the extra allowance and some won’t, regardless of their financial situation.

“It’s a ridiculous cliff-edge situation, where the benefit just stops. There’s no tapering or taking into account anyone’s situation.

“To me it’s a deliberate act by the Government to take some money back from the baby boomer generation that are seen as having done so well.

“They say 1948 was the best year to be born: the NHS was established that year, the economy has seen almost constant growth and house prices have rocketed.

“I think there’s a feeling that our generation has done extremely well and we should give a bit back.

“I think the worry for pensioners now is the inflation in things like food and fuel prices which are taking up more and more of someone’s income.”

HM Revenue and Customs (HMRC) say that they expect the moves to bring an extra 230,000 people into the income tax system, meaning that many Cumbrian pensioners will now have to fill out a self-assessment tax form every year

First published at 14:22, Thursday, 05 April 2012
Published by http://www.cumberlandnews.co.uk