How was the Spring 2024 budget for older people?
We’ve just had the latest Spring Budget from the UK chancellor, and hopes that issues affecting older people might receive some attention were on the whole sadly dashed.
Social care and national insurance
One of the many problems with a revolving door for government leaders is that policies change rapidly. Only a few years ago it was mooted that a rise in national insurance could fund improvements in social care. Since then national insurance has been reduced twice, and there’s been no alternative even hinted at for properly funding our ailing social care system. Many of the leaders in the care sector have expressed their disappointment, although it was pointed out that the cut in NI and the extension of the reduction in fuel duty would help home care workers.
NHS
The Chancellor has announced increased funding for day-to-day costs to the NHS. There are doubts that this funding will help in meeting the growing demand for NHS services. On the other hand, the ongoing capital investment in modernising services, especially digitalisation, is seen as a positive move.
Inheritance tax
Despite a swirling cloud of rumour around the reduction or even abolition of inheritance tax, the subject wasn’t mentioned in the Spring Budget. This came as a surprise to many, with the conclusion being that the move could have created an opportunity for criticism that outweighed pleasing some of the better off in this election year.
Lifetime pension allowance
For a minority of older workers, changes to the pension lifetime allowance will mean they can avoid hefty tax bills if they choose to remain in work. Doctors received a special mention, as retirement to reduce tax bills had been an issue in the NHS. The plan is to abolish the allowance altogether, although that would depend upon the current government continuing past the next election. Changes have also been announced in the pensions annual allowance that would see tax relief available on higher contributions to pensions in a single year, and an increase to the money purchase annual allowance relating to defined contribution pensions.
Income tax thresholds
Also unwelcome for many older people is the news that income tax thresholds have been frozen. This means that thousands of pensioners might find themselves paying more tax from April 2024, as the increase in the state pension could push their overall income into a higher tax bracket.
Triple lock
Not mentioned in the Budget statement, but confirmed later is the good news that the triple lock, which protects the value of pensions over time, will continue to be protected – for now.
Photo by Ming Jun Tan on Unsplash
