Why should pensioners be penalised for a life of prudence?
Why should pensioners be penalised for a life of prudence? Sir: The constant exhortation to save for retirement is both desirable and laudable but it is what happens to pensioners who have followed this advice during their working lives that concerns me. The personal income tax allowance this year for those under 65 is £4,895. This is increased to £7,090 for those aged 65-74. The higher allowance acknowledges not only pensioners’ contributions to society throughout their working lives but also the impact on static incomes as expenses increase and inflation takes effect. Whilst their prudence – to use Gordon Brown’s favourite word – in setting aside a portion of their earnings for their retirement is encouraged, this tax break proves to be yet another example of giving with one hand and taking back with the other, since it applies only to pensioners with an income under £19,500. Above this age-related limit the tax allowance is scaled back at the rate of £1 for every £2 in excess until
