Not much help for pensioners in the budget

Friday, 24 April 2009

It was never likely that the budget of April 2009 was going to be a crowd pleaser. After all, Government funds have largely disappeared on bailing out the banks, and it has little or no money left to play with and needed to claw some back in whatever way it could.

Has there been anything for pensioners?

Well, the bad news is that if you drink or smoke, then you’ll be paying more from this evening (always an immediate rise, this one, isn’t it?). Tax on alcohol goes up by 2% from midnight (roughly 4p on a pint), and tax on tobacco is up by 2% from 6pm.

The rise on fuel tax is delayed slightly, so that in September duty on fuel will go up 2p a litre. Then it will rise by 1p a litre above indexation every April for the next four years.

There have been some increases in payments to grandparents, older people and pensioners.

For grandparents of working age who look after their grandchildren that work will now count towards their entitlement for the basic state pension. The winter fuel allowance is to be maintained at higher level - £250 for over 60s and £400 for over 80s - for further year (this is £50 and £100 respectively on top of the standard payment). The basic state pension will be increased by at least 2.5%, regardless of inflation.

It is interesting that the budget states that “low inflation and interest rates mean many households will have higher real incomes in 2009.” This is unlikely to be true for pensioners, or anyone with savings, where low interest rates mean a cut in savings returns. Also, one of the main causes of low inflation is the low mortgage rate, which is also unlikely to be on benefit to pensioners. Instead, pensioners are suffering from increases in food prices.

All in all – not much help for pensioners and older people.

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