One mostly over-looked part of the coalition agreement is what it says on pensions:
We will restore the earnings link for the basic state pension from April 2011 with a “triple guarantee” that pensions are raised by the higher of earnings, prices or 2.5%, as proposed by the Liberal Democrats.
That, by the way, is a better deal for pensioners than offered by Labour who were talking about waiting an extra year before restoring the link and did not have an equivalent of the “triple guarantee” in their general election manifesto.
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4 Comments
and how do you intend to exempt pensioners from the coming hike in VAT?
I certainly missed that. It is a very important change.
It would also offset, to some extent, any increase in Vat that might have a larger and quicker effect on prices than on wages. However it will always run a year in arrears.
Pensions are likely to come under serious pressure from the inevitable rises in all basic and household costs this year.
VAT discriminates against the less well off. When I was VAT registered I added the required (then) 15% to my fee. I was able to set against that amount any subsequent purchases, or services with VAT added. In consequence I was able to retain sometimes as much 75% of the the amount of VAT on those purchases. Lower income people who are not earning enough to be VAT registered had to pay the whole amount of the VAT on their purchases, with no recourse.
In consequence my income was increased but the lower income people had their income diminished..
Pensioners have been getting help with winter fuel bills about November/December will that be continued under the new government??