The Winners and Losers
4th December 2013
As of the 2013/2014 tax year, personal allowances will be based upon a person’s date of birth rather than their age, with allowances for older people frozen at their 2012/2013 levels.
People born between 6 April 1938 and 5 April 1948 will receive a higher allowance, while those born before 6 April 1938 will receive slightly more. This means that people reaching the age of 65 or 75 during 2013/2014 will not see any increase to their personal allowance.
So who are the winners and losers?
Winners
The clear winners are younger basic rate taxpayers who will see their personal allowance increase by £1,335 – a tax benefit of £267. But for higher rate taxpayers the benefit is just £62. People who would normally qualify for the higher personal allowance when they turn 75 will not see any difference because the allowance is frozen, although the income level at which the additional age allowance is withdrawn has gone up by £700 to £26,100.
Losers
The biggest losers will be those turning 65 during 2013/2014. Instead of receiving the higher allowance of £10,500, they will continue to receive just the standard personal allowance of £9,440.
The same is true for anyone reaching 75 in 2013/2014, but they will only lose the modest increase from £10,500 to £10,660.
