UK Budget 2012 Pensioners hit again by raid on aged related allowances

UK budget 2012  UK Pensioners hit again

UK budget 2012  UK Pensioners hit again

UK Budget 2012 Pensioners hit again by raid on aged related allowances

Millions of pensioners are to be hit by the UK budget 2012 by Osborn’s raid UK budget 2012 UK Pensioners hit again on the age related higher rate allowance.

By abolishing the rate altogether for anyone retiring after April 2013 effectively means a loss of close to £300 a year for pensioners.

The way it works is like this;

Currently, the £10,500 personal allowance is worth an extra £479 a year to someone over 65, because they don’t have to pay 20% tax on the £2,395 difference between their £10,500 allowance and the £8,105 allowance for the under 65s. However, it is worth noting that the allowance is only given to pensioners whose total income is below £25,400.

The worst hit will be those in the early- to mid-60s who could have expected to enjoy a higher allowance at retirement after 6 April 2013. In effect, their allowance will be reduced from £10,500 to £9,105. This equates to a loss of £279. As every individual has a personal allowance, in a two-person household where both are about to retire the loss will be potentially £558.

UK budget 2012  UK Pensioners hit again 

Those over the age of 65 have, traditionally, had a higher personal allowance – £10,500 from April, and £10,660 for those over 75.

But these higher personal allowances will be frozen and eventually scrapped The decision to freeze the age-related personal tax allowances effectively means around 5 million pensioner tax payers will no longer get additional reductions in their tax over the coming years, while those on the top rate of tax will see their bills reduced

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