Following weeks of speculation as to what may be in the Budget, Clive Bolton, at-retirement director at Aviva, examines how some changes could hit the 18 million over-55s in the UK
"George Osborne's pledge to support low interest rates over the long-term may be good news for borrowers; however, this policy is a concern for the one in four (25%) over-55s who rely solely on their savings for income. It is vital that he remembers this group when he considers his budgetary policies.
"Any introduction of a so-called ‘mansion tax' appears to have been ruled out, which is good news for the over-55s who generally have the majority of their wealth tied up in their homes. If this tax is reconsidered in the future, a link to income would ensure that those who have benefitted from house price increases - but are struggling to survive on a fixed income - are not unduly penalised.
"If the Government does decide to listen to calls for value added tax (VAT) to be reduced from 20% to 17.5%, the UK's over-55s are likely to breathe a sigh of relief. They spend 15% of their income of food and 9% on energy bills so any measures which will reduce their monthly expenditure would be welcomed.
"In addition, more than one in four (28%) over-55s have an income of less than £1,000 per month, so the Governments promise to increase in the personal allowance to £8,105 from April 2012 will be welcomed."
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