Questionable benefit of pensions
Sir: This month pensioners will be getting the £1 increase which the Chancellor announced in his budget last March. But just how far does this benefit go? Quite apart from the price rise spiral since then, notably in essential consumer commodities such as food, which reduces part of the increase, there are other important considerations.
A large number of pensioners, are, by necessity, compelled to obtain some part time employment to augment the state allowance. As these earnings are added to the pension there is another one pound which is liable to tax. When the increase becomes operative, the earnings allowance will be raised to £9.50, before pension is affected by a reduction of 50 per cent for each 10p earned above this. It is obvious there fore that with the earnings limit raised, a pensioner paid £9.50 for part time work, will then be taxed on both the full pension and his employment pay as well; so that he could be worse off than before.
This is quite iniquitous, as most people spend the best part of their lives working, and have paid towards a retirement pension by weekly deductions at source. On reaching retirement age the full pension should be free of tax irrespective of any pay for part time working. Could not the Government appoint a special committee to investigate the whole question of taxing the pension itself, and recommend some easing of the burden of tax in these cases, at present often resulting in hardship. H. H. Dennis
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