As we approach the General Election, it is clear further cuts in public spending and/or increases in tax will be introduced in the next Parliament. If the past is anything to go by, many of the cuts/tax increases will be done by stealth, irrespective of who forms the Government.
It has been reported that the present government is looking at combining Income Tax and National Insurance contributions “to simplify the system and make it easier to understand and reduce costs”.
It would be easy to combine the contributions to give a single rate equivalent to both of them (the present Income Tax rate of 20% possibly being increased to 30/32% and National Insurance contributions being eliminated) reducing costs. It would also be simple to understand instead of the present system where an adjustment in Income Tax is nullified by an adjustment in National Insurance.
If the above change happens there is a strong possibility that millions of pensioners will lose out dramatically (up to an additional 10/12%, this would be the cruelest stealth tax ever) because at present pensioners do not pay National Insurance contributions but do not qualify for the vast majority of benefits.
The pensioners who could/would lose out are the very ones who have paid into pension schemes receiving only the present basic state pension to try to ensure a reasonable standard of living during retirement without relying on state benefits.
With the above in mind, would the parties explain their intentions either as a single party government or part of a coalition government to protect the millions of pensioners who could be living on a greatly reduced income despite making every preparation during their working life to ensure they are not a burden on the state.