OK, in percentage terms we’re still not talking big numbers. Five years ago, around 7% of pensioners were high rate taxpayers, now it’s 12%. However, the fact that the actual numbers have more than doubled shows that the total of pensioners now in the tax net has increased by quite a bit, too. That’s stealth taxation for you, your income goes up, allowances stay put and many at the other (poorer) end go from non- to basic rate at a stroke. Tax from the bottom will, of course, be harder to collect, as many there will not (willingly) realise that they have become taxpayers, the state pension is paid tax-free and it will in theory be up to them to declare their new status. Those already nudging the upper end will simply have their tax codes adjusted. HMRC’s answer is to expand and simplify online tax returns. Good luck with that, I’d say, for the many non- and still resistant internetters in those particular age groups.
“Pensions minister: ‘we have created saving pots, but not a pension system’”
The OBR (Office of Budget Responsibility, as opposed to the OBI, often said to be housed in No.11) said this week that pensions were one of the biggest problems to be faced by this and future governments.
