A two-tier state pension – Labour’s latest strike on Britain’s workers
By handing tax breaks to just some retirees, the Chancellor has opened a divide that will grow and grow
Division – or a perception of it – ripples throughout many facets of British society, from policing and the justice system to the chasm between private and public sector workers.
One aspect of civic life that has, until now, escaped the “two-tier” tarred brush is the state pension. But that is about to change.
In last month’s Budget, Rachel Reeves made the devastating confirmation that income tax thresholds would be frozen for three more years, dragging hundreds of thousands of pensioners into the income tax net from 2027-28, and potentially including those on the full new state pension, when annual increases push it above the £12,570 personal allowance.
Then, without fanfare and almost in a whisper, the Chancellor announced that people on solely the old or new state pension would not pay tax this Parliament. The Chancellor later repeated the policy on ITV News.
The announcement sparked outrage at the Labour Government’s creation of a “two-tier’ system that made some retirees more equal than others.
Conservative peer Lord Mackinlay said the “two-tier taxation” would leave people questioning why they ever saved into a pension. Helen Morrissey, of Hargreaves Lansdown, called it “grossly unfair” on those who had.
Exactly how much it will save those people on the lowest incomes remains unknown, and the Treasury doesn’t know how many people will actually benefit. But it does signal that, once again, Labour appears to be rewarding those who have put less into the system than others.
Save for your future – and get punished
Despite a manifesto promise not to raise taxes on working people, many feel the latest Budget did the exact opposite.
Working people will pay more income tax, while savers and landlords will be subject to extra punishment. Conversely, some groups, most notably families with three or more children on benefits – and state pensioners with no private savings – will see their incomes rise.
Extending the freeze on income tax thresholds to 2031 will hit anyone whose income exceeds £12,570 over the next six years, while the Chancellor’s £4.7bn raid on salary sacrifice schemes could cost some workers more than £50,000 in retirement.
Lord Mackinlay, a Conservative peer and former MP, said: “The elegant solution would have been to give everyone in the country a personal [tax-free] allowance reflecting the basic state pension. It would have been easy and fair.
“But no, this Government has decided to introduce yet another two-tier taxation for those who have worked hard all their life and been diligent. People will ask, what’s the point in saving into a pension? Why did I bother?
“This is where fiscal drag hits the road of reality for millions of taxpayers. This Labour Chancellor has created this.”
The Telegraph: continue reading
••••
The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)
••••
Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.
••••
Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.
••••
Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Liberty Beacon Project.
Leave a Reply