To ask the Chancellor of the Exchequer what estimate he has made of the number of individuals who will be affected by his decision to (a) freeze age-related allowances and (b) restrict age-related allowances to existing recipients from April 2013 in each (i) region, (ii) local authority and (iii) parliamentary constituency in (A) 2013-14, (B) 2014-15 and (C) 2015-16.
To ask the Chancellor of the Exchequer how many people in (a) Scotland, (b) each parliamentary constituency in Scotland and (c) each local authority area in Scotland aged (i) between 65 and 74 years and (ii) 75 years and over, will be in receipt of the age-related personal allowance (A) in and (B) each of the following two financial years; and if he will estimate what the average difference in pensioner income would be had the thresholds been uprated in line with inflation.
The information is as follows:
(i)-(iii) The Government remains committed to supporting pensioners and has introduced a triple guarantee for the basic state pension ensuring it will increase each year by the highest of earnings, prices or 2.5%. From April 2012, the basic state pension increased by £5.30, the biggest cash increase ever. The Government has also protected other key pensioner benefits. The triple guarantee means that a full basic state pension will be over £120 per year higher than under the previous Government's uprating policy.
The 2012 Budget announced that from 2013-14, age-related allowances will: (a) be frozen at their 2012-13 levels until they align with the personal allowance; and (b) that they will no longer be available, except to those born on or before
These changes will simplify the personal allowance system and reduce the number of pensioners in self-assessment.
The “Overview of Tax Legislation and Rates” published alongside Budget 2012 states that, in 2013-14, an estimated 4.41 million individuals will be affected by these changes compared with RPI indexation of age-related allowances and no change to eligibility, though none will see any cash reduction in their personal allowance from April 2013 compared with 2012-13.
Estimates of numbers affected and average impacts on income tax paid at Government office region level are provided in the following table for 2013-14. Reliable estimates are not available at the local authority and parliamentary constituency levels due to greater uncertainties in making projections for small geographical areas.
|Estimated impacts in 2013-14|
|Number s affected (thousand)||Average change in tax paid (£)|
|Government office region||Freeze age-related allowance||Restrict eligibility||Combined changes||Combined changes|
|North West and Merseyside||482||60||487||+83|
|Yorkshire and the Humber||358||46||363||+83|
|East of England||433||53||437||+81|
Available information for tax years 2014-15 and 2015-16 is provided in the following table. Estimated impacts arising from the announced changes to eligibility for age-related allowances cannot be provided for tax years after 2013-14, as these will depend on the level of the personal allowance for under 65s.
The Government is committed to supporting lower and middle income earners by raising the personal allowance to £10,000, and removing the lowest income individuals out of income tax. Decisions on changes in the personal allowance from 2014-15 will be taken as part of the annual Budget process in the context of the wider public finances.
|Number s affected by the freeze in age-related allowances from April 2013 in 2014-15 and 2015-16|
|Government office region||2014-15||2015-16|
|North West and Merseyside||518||559|
|Yorkshire and the Humber||390||419|
|East of England||465||496|
(iv) A projected 471,000 income taxpayers in Scotland are expected to benefit from age-related allowances in 2012-13, ie would pay more income tax if age-related allowances were not available in 2012-13. Within the total, 266,000 are aged 65-74 and 205,000 are aged 75 and over. Reliable estimates are not available at the local authority and parliamentary constituency levels due to greater uncertainties in making projections for small geographical areas.
All estimates are based on the 2009-10 Survey of Personal Incomes, projected using economic assumptions consistent with the Office for Budget Responsibility's March 2012 Economic and fiscal outlook.