This report argues that the UK’s dangerous level of public debt means new personal tax cuts must remain off the table. Furthermore, future governments must consider measures to ensure that older people share in increasing tax burdens.
The report praises the Government for phasing out the higher personal allowances for pensioners (“age-related allowances”), but urges Ministers to go further and review the exemption from paying National Insurance Contributions above State Pension Age. This tax break does not reflect the modern labour market in which age is now a less reliable indicator of need. The report also questions the future of tax relief for pensions, on the grounds that it is “expensive, poorly targeted and fails to achieve its policy objectives”.