TaxPersonal TaxDarling unveils pensioners tax credit

Darling unveils pensioners tax credit

Pensioners with modest savings or incomes will be able to benefit from a new tax credit under plans unveiled yesterday by social security secretary Alistair Darling.

The pension credit will create a reward for saving. On top of the minimum income guarantee, for every pound saved pensioners receiving the credit will get a cash top up.

In addition money will be paid to those who cannot receive the minimum income guarantee because of the capital limits rules preventing the payment if a pensioner holds an occupational pension of a certain size. Instead the amount of income people receive from their savings will be taken into account.

‘Until now, people on low incomes who have some sort of second pension have always lost out. They’ve been stuck in the savings trap,’ said Darling.

‘That would be a fairer and more realistic way of deciding who receives extra help. We are giving a clear message ? that it always pays to save,’ he said.

Darling said he would be set out full details of the new system in a consultation document later this autumn with a view to introducing the necessary legislation for the next parliament.

The new rules will also permit a major reduction in the red tape and paperwork pensioners have traditionally had to fill in.

The Conservative Party dismissed the proposals as ‘spin’ designed to head off a revolt over pensions at Labour?s conference later this month.

DSS release

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

3d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter