Debate on ‘Granny Tax’ reaches House of Commons

A petition against Chancellor George Osborne’s decision to freeze Old Age Pensioners tax allowances and to cancel them for those turning 65 after 5 April 2013 has reached over 100,000 responses.

The petition argues that “at a time when pensioners are struggling to make ends meet and yet are a group of people due to age, health etc who often have extremely limited opportunity to make good lost income, this reduction is grossly unfair".

Before this decision, pensioners were given a higher tax allowance than the rest of the population. Tax breaks will mean that older people will have to pay an extra £3.3bn in income tax over the next four years according to Treasury figures.

In a statement, Her Majesty’s Treasury responded: “The government accepted that many people will be disappointed by these decisions. However, no one will pay any more tax as a result of these changes. Indeed, those affected by the withdrawal of Age-Related Allowances also benefit from the largest ever cash increase in the Personal Allowance.

“The government has also continued to support pensioners in other ways. In April 2012, the basic state pension increased by £5.30, the biggest cash increase ever, and we have introduced a triple guarantee ensuring it will increase each and every year by the highest of earnings.”

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