In an interview on the Today programme this morning Paul Johnson, the director of the Institute for Fiscal Studies, said that Alexander Boris de Pfeffel Johnson’s plan for a tax cut for high earners would be particularly advantageous to wealthy pensioners. He explained:
What [Johnson] has said is that he wants to raise the point at which you start to pay higher rate tax to £80,000. But at the same time, and this does make sense, you would increase the national insurance ceiling to the same level. So the net cost would be in the order of £10bn a year. That’s obviously a lot of money. It helps the 10% highest earners. And it is worth saying that the group who would benefit the most would be the high-income pensioners who don’t pay national insurance at all. So there’s a particular group who do particularly well - that’s those over the age of state pension age with more than £80,000 a year.
By remarkable coincidence, wealthy pensioners are disproportionately represented amongst the Conservative party membership, the group that will select the next leader. According to a study of party membership published last year (pdf) by academics from the Mile End Institute, the average age of Conservative party members is 57 and 44% of them are above the age of 65.
