My wife and I are approaching the normal age for retirement. I have taken early retirement. Neither of us make any claim on direct State benefits or tax credits. Neither of us has inherited wealth. We have both paid into our employers' pension schemes. We bought a fairly average flat at a time when the cost and high interest rates made it difficult to do so. We have, over many years, saved, and tried to make further investments to ensure we have independence and choices in our old age. Under New Labour, our pension scheme gains are taxed. My modest pension is, subject to a small personal allowance, taxed as 'earned income'. The main benefit under our equity-based 'tax-free' PEPs and ISAs is now taxed. The interest on our cash savings is taxed, reducing the gains to less than the erosion in value caused by the real rate of inflation. Council tax increases inexorably at a rate greater than my 'inflation-proof' pension. The Treasury has skimmed money from the Premium Bond Prize Fund, reducing our income from this to below the inflation rate. The prudent essentials of life, such as the insurance premium on our home, are taxed. Essential repairs to our roof are taxed at the same level as our young neighbour's luxury home extension. New Labour now exhort us to work longer and make more provision for our future, yet continue to tax every form of investment. Despite this, we have made some progress in providing for ourselves. Should I die, rather than require the money for my old age, my wife will inherit it all. If she doesn't go wild with the money, but keeps it to provide for her own needs, then her early death will result in us being rewarded with an inheritance tax bill of £120,000+. This amount will go to the Treasury, rather than to our nominated beneficiaries to provide independence and choices for them, and to ensure they do not need state benefits. The Treasury will use this tax income to fund minimum income guarantees and pension tax credits for those who earned the same as us, but did not save, invest, or buy a pension, but ate out more often, went on more foreign holidays, and traded-in the car each year for the latest model. This tax is, for ordinary people attempting to be independent and provide for themselves, punitive and iniquitous.
Toom