Pensioners still face hardship over the 10p tax debacle

Up to one million older women aged 60-64 will still suffer as a result of the abolition of the 10p tax rate.

The National Pensioners Convention (NPC) believes that even the compensation package announced today by the Chancellor of Exchequer, will not be sufficient to reimburse all those women who have seen their tax bills rise since April 1.

Many women pensioners are telling us how this tax change will have a serious impact on their standard of living. One example is a 63-year-old widow who has a NHS pension on top of her state pension bringing her total income to just £11,000. Her company pension will rise but the increase in tax from 10% to 20% will mean she is now worse off than before.

Millions of pensioners above 65 will also be hit. Someone with a taxable income of just £6500 already pays over £1000 a year in tax - but will now be asked to find a further £130 because of the abolition of the 10p tax rate.

These pensioners will receive no compensation whatsoever, whilst women aged 60-64 may not get enough through the blanket compensation package that's been proposed to cover their losses in full. This whole episode has severely damaged the government's standing with older people and the only way to regain it will be to urgently tackle the real problems they face by raising the basic state pension and restoring its link to earnings.