Paul Lewis
Nearly every tax allowance is being frozen and will not rise in 2010/11, so the Inheritance Tax threshold will stay at £325,000. With rising house prices, more estates will be dragged into its net. Personal allowances will be frozen, so for millions of taxpayers who also get a state pension, the extra £2.40 on their pension will be worth just £1.92 after basic rate tax.
Another tax will hit everyone with a telephone. From October 1 a "Landline Duty" of 50p a month or £6 a year will be added to every fixed-line phone bill – including cable services. The new tax will raise £175 million a year, which will be spent on bringing broadband computer services to rural areas.
Age entitlement rises
The state pension threshold for women born in April 1955 will be 65 by April 2020. From April the age at which women can claim their state pension will go up month by month until in April 2020 it will reach 65 for those born on April 6, 1955 or later. Entitlement to Pension Credit – currently 60 for men and women – will follow state pension age for women, and free bus travel and free NHS prescriptions will also rise from April in the same way. Entitlement to all these things will happen on set dates as shown in the table for people who reach 60 in 2010/11.
As all claims for bus passes will be concentrated on one day every two months, it is likely that councils will become very busy and there may well be delays.
Whatever your date of birth you can check on your date of entitlement at pensions.direct.gov.uk/en/state-pension-age-calculator/home.asp- for everything except state pension, men should put their gender as "female".
The new rules mean that the 56-year-old Chancellor of the Exchequer, Alistair Darling, will have to wait until July 6, 2017 when he is 63 years and seven months old, to get his bus pass and free NHS prescriptions.
The winter fuel payment will also be subject to these rules. This coming winter you will have to be born on July 5, 1950 or earlier to qualify for it. The change does not affect anyone born before April 6, 1950.
Written by Paul Lewis, this article first appeared in the February 2010 edition of Saga Magazine. Paul's opinions are his own and for general information only. Always seek independent financial advice.