Time for Chancellor to End the Tax War on Boomers

Over the last few years politicians have acted on an assumption that older people are an easy source of revenue. No single measure amounts to a declared tax war on pensioners but taken together the direction is unmistakable: people who have spent decades saving, buying a home or building a business are being asked to shoulder an increasingly disproportionate tax burden. It is my hope that the Chancellor doesn’t make the same mistake when he stands up to deliver his first Budget.

I’m not suggesting that older people should be insulated from every difficult decision. Nor is it a party-political complaint. Successive governments have contributed to the problem. It is an argument for fairness and for recognising the difference between accumulated assets and disposable income.

Older people have been the victims of fiscal drag. The personal allowance has been frozen while the State Pension, and many private pensions, have risen. The increases, intended to protect their spending power, have pulled more of their income into tax.

Inheritance tax tells a similar story. The standard nil-rate band has remained at £325,000 since 2009, despite the rise in house prices. Parfitt Cresswell is based in London and the Southeast and here we’re seeing unremarkable family homes now push an estate over the tax threshold.  From April 2027, most unused defined contribution pension funds and death benefits will also be brought into estates for inheritance tax purposes. The two issues together will create a whole new tax burden on very ordinary families.

It doesn’t stop there. Stamp duty can make downsizing financially unattractive. Council tax can continue rising for people living on fixed or slowly growing incomes and changes to business (and agricultural) property relief affect owners who expected a viable enterprise to pass to the next generation.

The announced High Value Council Tax Surcharge, sometimes called a ‘mansion tax’, is due to apply from April 2028 to owners of residential properties in England valued at £2 million or more a level that can encompass relatively ordinary, long-owned family homes in London. Published annual charges range from £2,500 to £7,500, in addition to existing council tax. Earlier speculation about lowering the threshold to £1.5 million has reportedly been dropped, although pre-Budget reporting is not a formal policy announcement. The surcharge is not a replacement for stamp duty. Its consultation proposed a deferral mechanism for those unable to meet annual payments; the final terms and their practical effect remain important. The concern is the potential mismatch between a recurring property-based bill and a homeowner’s available income, rather than an assumption that every owner of a valuable home faces the same circumstances.

Politicians are treating a valuable asset as though it were cash sitting in a bank account. An older person living in a house that has risen sharply in value has not necessarily enjoyed a corresponding rise in income. A person’s home is not an investment portfolio; it is a basic human necessity providing a roof over their head and it will often carry decades of memories and provide stability, family support and a sense of community. Telling that person to sell ignores the financial cost, practical upheaval and emotional strain of moving later in life. And houses don’t sell overnight, particularly when you’ve just introduced a new tax on them.

I urge the Chancellor to carry out an impact assessment of policies affecting people approaching and in retirement. Tax thresholds should be reviewed regularly rather than left to shrink silently through inflation. Any further property-based levy must include safeguards for people who are asset-rich but income-poor. Changes to pensions and inheritance tax should come with clear transitional arrangements so families have time to obtain advice and adjust their plans.

A fair tax system should respond to people’s ability to pay, not make assumptions based on their age or the paper value of assets they may be unable to sell. The Budget is an opportunity to stop treating responsible saving as evidence that someone can absorb one more charge. Older people should contribute fairly, like everyone else. They should not be the default answer whenever the Treasury needs more money.