Pension boost for thousands to be fast-tracked in Budget

Updated: 


George Osborne

George Osborne is set to bring good news for pensioners in this weeks' Budget. Perhaps its no surprise that pensioners (the Conservative Party's most reliable voters) have escaped much of the pain in previous Budgets. However, this Budget could actually bring good news for this group.

The overhauling of the pension and care systems are going to be more generous, and are going to come far sooner than was expected.


Pensions

The shake-up to pensions was already on the cards. The introduction of the flat-rate state pension in 2017 has been widely publicised - along with plans for the years spent raising a family to be counted when calculating whether individuals have earned a full state pension.

However, over the weekend, Osborne told the BBC's Andrew Marr Show that this would be brought forward to 2016. This will mean that 400,000 more people are going to benefit from the change - receiving roughly £144 -a-week.

It is seen as a major advance for those who are not currently entitled to the state second pension - who will receive more under the new system. It will also benefit couples - who will now receive two sets of the flat-rate pension - rather than a lower couples rate such as the one that operates in the current system.

He told the programme: "That's a generous pension for pensioners. It's a huge boost for people who want to save for their retirement."

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Care

Changes to the way we pay for care in old age are also widely expected. The government recently announced that it would follow recommendations and bring in a cap on the total any individual could be expected to pay for care. Unfortunately at the time there was widespread disappointment that the cap would be set at £75,000.

Now Osborne has told the programme that the cap would be slightly lower - at £72.000. It will also come in sooner than expected - in 2016.

Reaction

The reaction has been muted. Michelle Mitchell, the director-general of the charity Age UK, told the Independent that the move was: "welcome but modest". The National Pensioners Convention is not convinced that anything short of merging health and social care - and funding it all through taxation - will make the slightest difference.

It says: "The government needs to be much braver and bolder if it is really going to sort out the problems – otherwise in a few years' time we'll be back again having another look at the issue."

The Arbuthnot banking group has also predicted that the Budget will see another increase in the basic rate income tax threshold - which will be a boost for pensioners - especially those on lower incomes.

So what do you think? Is this Budget a game-changer for pensioners, or are we just seeing tinkering round the edges? Let us know in the comments.

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