What the 2018 Budget means for older people

Posted on: 28th Feb 2019

Whilst the Chancellor set out some extra spending in key areas such as the NHS, he prefaced his remarks by saying that he might need to present an Emergency Budget in the event of no deal being secured in Brexit negotiations, so this was in many ways a ‘wait and see’ Budget.

Taxation and pensions

The personal allowance will increase from £11,850 to £12,500 in April 2019, a year earlier than originally planned. The threshold for paying higher rate tax will also rise from £46,350 in 2018-19 to £50,000 in 2019-20.

Although there had been speculation that major changes to pension taxation might be in the offing, these didn’t materialise. However, the Lifetime Allowance will increase in line with the Consumer Prices Index to £1,055,000 for 2019-20. The annual ISA limit of £20,000 remains unchanged for 2019-20. The dividend allowance of £2,000 remains unchanged, as does the personal savings allowance of either £1,000, £500 or £0 (according to marginal tax rate).

Social care

Many commentators felt that the proposed investment in social care – £650m plus £55m on disabled facilities – wasn’t enough and would do little to improve the overall standard of support available in the community. The spending plans that were announced prioritised lessening pressure on the NHS by reducing bed blocking, rather than ensuring
improvements in care packages.

The promised £20.5bn over five years for the NHS in England comes as good news, but how this will be allocated isn’t clear. The commitment to put extra money into mental health care is also welcome, and it’s hoped that some of that money will be allocated to the care of elderly patients.

In addition to the cold calling ban, National Trading Standards are due to receive additional funding to extend the provision of call blocking technology for vulnerable people.

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Number of working women aged 60-64 has doubled

Employment statistics show that more women are staying in the workplace for longer, with 48.5% in this age bracket in employment2, compared with just 23.4% back in 1998. This is attributed variously to the short-notice rise in the state pension age from 60 to 65 or 66 currently affecting many women born in the 1950s, higher incidence of divorce later in life, financial necessity, or simply a desire to keep mentally active.

It’s also a welcome indication that employers acknowledge the benefits of retaining the skills of older employees within the workplace, though most employers can no longer force retirement when an employee reaches a certain age.

2Royal London, Oct 2018