NI 'may be hardest hit' by granny tax

Published Monday, 29 April 2013
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Changes to pensioners' tax allowances, which experts have warned could hit those in Northern Ireland the hardest, is set to be debated by MPs later.

NI 'may be hardest hit' by granny tax
The household income in Northern Ireland is £77 a week, it has been claimed. (© Getty)

The Government will be urged to consider the potential impact of the so-called "granny tax", which sees the removal of extra personal tax allowances for those turning 65 after 5 April.

The Association of Chartered Certified Accountants (ACCA) claimed pensioners in Northern Ireland will feel the brunt of the changes because their discretionary income is 53% lower than the rest of the UK.

ACCA Ulster Network's Brian McGuire said it was unfair to dictate how much tax an individual pays based on when they turn 65.

"Anyone turning 65 after April 5 2013 has to pay £259 a year more than those who turned 65 before that cut-off date," Mr McGuire said.

"Available means to pay doesn't seem to come into play."

He said discretionary household income in Northern Ireland is £77 a week, compared with the UK average of £146.

Mr McGuire, who based his figures on the latest Asda Income Tracker, warned the realisation of the Government policy would have a varying impact on a regional basis.

"People spend most of their lives planning finances for retirement. Taking away the allowance for new and future pensioners is like pulling the rug from under their feet," Mr McGuire added.

According to the ACCA, the tax allowance freeze will cost pensioners £500 a year, or £10,000 over their retired lifetime.

The debate on the issue, which takes place in Parliament later on Monday, was prompted after pressure groups secured 114,464 signatures in a petition.

Chancellor of the Exchequer George Osborne announced plans in the budget to axe the special tax break that gave pensioners a higher tax allowance.

This enabled them to earn an extra £3,000 before paying income tax.

Now, anyone who reaches their 65th birthday after 5 April 2013 will no longer qualify for the higher tax allowance.

This means people approaching retirement will have the same tax allowance they had when they were in work and earning more money.

Mr Osborne said the measures were introduced to raise an extra £3.5bn over the next five years.

But pensioners and pressure groups have called for a u-turn.

© UTV News
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4 Comments
David in East Belfast wrote (599 days ago):
I'm falling into that bracket, and I don't see why pensioners got a higher allowance anyway. Surely if your income is such that this tax comes into play, then you can afford to pay the tax like everyone else. Remember we didn't pay the tax when building up the pension, so fairs fair. It's getting to the stage that the well off and pensioners are the only ones with money!
Paul in London wrote (599 days ago):
Dee i suggest you read my comment again!!!! I said Ireland.... The Irish government really look after pensioners compared to Britain. I would NEVER visit N.I never mind live in it.
Dee Dee in Northern Ireland wrote (599 days ago):
"Pensioners in Northern Ireland are really looked after compared to Britain" by Paul from London...Really...where do you get your information? Only a person who isn't living in Northern Ireland could possibly make a comment like that in the same week as the announcement that many of our care homes are being closed down with an unacceptable amount of warning for the families of the pensioners involved. Maybe he doesn't realise how much it costs for the average family over here to make up the remainder of the cost of having their elderly parents looked after, in their own homes, by their professional carers for even a reasonable amount of time every day to ensure that their basic care needs are met! Well, my family does & those costs aren't easy to cover, even when it's being split between siblings!
Paul in London wrote (600 days ago):
Pensioners in Ireland are really looked after compared to Britain.
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