First, the Chancellor came for the Winter Fuel Payment.
Chancellor Rachel Reeves is picking off our wealth, little by little (Image: Getty)
That was only a warning shot. A sign that Labour was coming after pensioners. Or “boomers”, as resentful left-wingers call them. This was partly a cash grab, partly punishment for voting for Brexit but not Labour.
Reeves was forced to hand the payment back to all but two million pensioners by the sheer scale of the revolt. Yet she pressed on with her other tax raids. After clumsily widening her black hole from £22billion to £50billion – butterfingers! – she’s now about to double down.
In last October’s Budget, she targeted elderly savers again, plotting to slap inheritance tax on unused pension pots when they die.
With beneficiaries also paying income tax on withdrawals, some could see three-quarters of their lifetime savings swallowed by the Treasury.
Reeves also hiked capital gains tax in the Budget (to be fair, the Tories showed her the way). Then this year, it emerged she had her greedy eyes on pensioners once more, with plans to slash the Cash ISA allowance from £20,000 to just £4,000.
Elderly savers rely on Cash ISAs as a risk-free way to generate income from nest eggs built over a lifetime. As yet, we still don’t know what Reeves will do.
Now this year’s Budget is looming like a recurring bad dream.
Having already strangled growth, Reeves is plotting another round of tax raids in a desperate bid to balance the books.
She looks ready to hit inheritances, again. Rumours suggest she may scrap the seven-year rule on wealth transfers and impose a lifetime cap on gifts to family, dragging many more estates into the inheritance tax net.
She is also circling our pensions, again. Tax relief on contributions costs the Treasury tens of billions a year, making it an easy target. Now there are reports she’ll target the hugely popular 25% tax-free pension lump sum.
Yet even that will not plug her gaping deficit. Which is why Reeves is said to be considering something Labour’s left has demanded for years.
Now she’s coming after our homes.
As I warned yesterday, Reeves is looking to do something no Chancellor has dared to do. Which is to slap capital gains tax on any growth in the value of our own homes. Not second properties, homes.
This could see basic rate taxpayers pay 18% of any increase in its value, rising to 24% for higher earners. While the plan would only apply to expensive £1.5million homes at first, it sets a terrifying precedent.
First, once set, that threshold will never increase, dragging more into the net property prices rise. Second, there’s a chance any future cash-strapped Chancellor will cut it, and cut it again.
There’s another plan knocking around the Treasury, which would place an annual charge on the value of properties as low as £500,000. The levy would roll up over the years and hit people with a massive bill when they sell. Basically, it would be a wealth tax on homeowners.
Either move would be a disaster for pensioners in particular, who often live in larger family homes while surviving on modest incomes.
The longer someone lives in a home, the greater the bill. Plus the property may be hit with inheritance tax as well.
Labour are launching one tax grab after another. And most are aimed squarely at pensioners.
The blow will fall on the prudent and thrifty who have worked hard, gone without, and done everything asked of them to save for the future.
Reeves has already targeted our pensions, savings and inheritances. With grim inevitability, she’s now coming for the roofs above our heads.
