The Effectsof the 2012 Budget on the elderly and the Age Allowance
A group that is being pressed financially by the latest budget proposals are those who are entitled to what is known as the “age allowance”.
People aged 65-74 and those aged 75 or over enjoy a tax free allowance of £10,500 and £10,660 respectively as long as the level of income does not exceed £25,400.
Where income exceeds the £25,400 the amount of age allowance is clawed back by £1 for every £2 of extra income until it reaches the standard personal allowance of £8105.
The Budget announced that those who attain the age of 65 after 5th April 2013 will not benefit from the higher tax free allowance.
Those who are already entitled to the extra tax free income will retain it but find that the age allowance will be frozen and replaced by the standard personal allowance when it matches the level of the higher figure.
People who find themselves in these groups therefore have the greatest need to nurture everything that they have accrued.
Financial planning may not bring financial freedom but can “make do” and mend resources that have not received the attention they deserve.
The results are often surprising and invariably put people in an improved financial position.
In austere times everyone has a responsibility to make the most of their finances. If you would like to know more about how to presenrve your tax free Age Allowance
Give your independent financial adviser a call now.