Jeremy Hunt will outline the Government’s fiscal strategy going forward in the announcement which will likely outline changes to pensions and taxes. Experts are urging the Chancellor consider reducing the tax liability for pensioners as there is “room for a cut”.
Ray Black, a chartered financial planner at Money Minder, broke down why this tax cut may appear in the Spring Budget.
Mr Black said: “Having only recently raised taxes and also stating that tax cuts will have to wait until inflation is under control, it seems unlikely that the Chancellor will be announcing any big reductions in taxes in the budget.
“However, there does appear to be some pressure from the back benches for Jeremey Hunt to provide hope to the public that the Government’s budgeting is in good form and they are on the right track to grant some concessions sooner rather than later.”
He cited a recent intervention from Conservative MP Sir Edward Leigh who was reported to have called for a better tax deal for pensioners at a meeting of the 1922 Committee.
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Sir Leigh reportedly said: “My view is you can’t wait until the general election. People are depressed. You’ve got to give them hope.
“You’ve got to say, ‘We made the right decisions in September, therefore that’s given me room in this budget to cut taxes’ – whether it’s corporation, personal or fuel.”
Households have been hit with soaring inflation-hiked prices and rising energy bills over the last year.
Pensioners have been among the most adversely affected groups which Mr Black believes may taken into account.
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The finance expert noted why considering this option may be useful for Rishi Sunak’s Government going forward.
Mr Black added: “If the Chancellor was inclined to take such action in this Budget, rather than waiting until later, it could have some very positive outcomes for the Government in both the short and medium term.
“The General Election is edging closer every month and the campaigning for votes will be hard fought between now and autumn 2024.
“All of the major parties will need to work very hard between now and then to have a chance of running the country for the next term of Government.
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“And in my opinion it’s never too early to provide the electorate with the confidence they need to feel that the UK economy is going in the right direction, and for politicians to do everything they can to put an appreciative smile on our faces.”
One of the reasons the Government may be considering a tax cut for pensioners is in light of rumoured changes to the state pension age.
As soon as someone reaches the state pension age of 66, they are entitled to regular payments to help in their retirement.
Under current legislation, this age threshold is set to be raised to 67 years of age by 2028 at the latest.
New reports emerged recently, suggesting the Government is looking at bringing forward the age at which someone gets their retirement payments.
Specifically, the time period when the state pension age is increased to 68 could come earlier than expected.
Raising the state pension earlier than expected could free up Government spending for pensioner tax relief, according to experts.
Jeremy Hunt is set to announce the details of the Budget in the House of Commons on March 15, 2023.
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