What has Labour got against pensioners? It seems like the bulk of the Autumn Budget tax grab will fall on their shoulders.
Actually, that’s a daft question. Labour has everything against pensioners. Starting with the fact that they’re the age group least likely to vote for them. It’s almost like Labour is punishing them as a result.
Reeves knows she is free to hit them with tax hikes and benefit cuts, knowing Labour won’t lose so many votes.
After years of demonising “boomers”, many on the left see pensioners as wealthy and ripe for the plucking. Starting with the Winter Fuel Payment.
While many better-off pensioners didn’t need their Winter Fuel Payment, two or three million on low incomes desperately need it and now face staggering hardship as a result.
Reeves followed that bombshell by axing the £86,000 social care cap, in a move that gives local authorities carte blanche to raid people’s homes to cover long-term care costs.
In next week’s Budget, she’ll go after their capital gains and inheritances, too. These will mostly hit older people for the obvious reason that they’ve had time to build up more wealth.
Something that Labour appears to view as a moral flaw.
Now Reeves is lining up a new onslaught that will hit more than 2.5 million pensioners and they won’t all be wealthy, either. A million earn so little they don’t even pay income tax today.
That’s about to change.
Reeves is rumoured to extending the income tax threshold freeze so that it runs until 2030, instead of 2028 as originally planned.
Jon Greer, head of retirement policy at Quilter, crunched the numbers and came to the blunt conclusion: “This will be yet another blow to pensioners.”
To be fair to Labour, it was the former Tory PM Rishi Sunak who introduced the tax threshold freeze in the first place.
That will pull 3.1 million retirees into higher tax brackets by 2027/28, according to a Freedom of Information request by Quilter.
If Reeves extends it, one million pensioners who do not pay income tax today will be dragged into the 20% basic rate tax band.
A further 1.5 million who already pay income tax will find themselves in the higher rate 40% band.
So in total 2.5million would be caught if Reeves presses on. That’s on top of more than 25 million workers who will also be hit by the freeze, despite Labour’s pledge not to hit working people.
At some point in the next two or three years, retirees who only get the state pension will find themselves paying income tax on it.
Those with a combination of state and private pensions will feel the hit even sooner, Greer said. “This will erode their incomes at a time when financial security is crucial.”
He said this “adds salt to the wound” following Reeves’ decision to axe the Winter Fuel Payment despite rising energy costs. “Together, these policies threaten to squeeze pensioners from all sides.”
Pensioners are being squeezed from all sides politically, too. Labour is simply picking up where the Conservatives left off.
With many pressing for pensioners to pay national insurance on any earnings, too, the onslaught isn’t going to stop.
