VAT ‘to hit over-50s more’

Those aged over 50 will pay more than younger people in tax as a result of the VAT increase, it has been stated.

Research compiled by insurance firm Rias and the centre for economics and business research found that the restoration of the 17.5 per cent rate will lead to older people forking out an extra £524 million per year.

As well as the nature of goods such people are spending more of their money on, the total spending of this group is 13 per cent more than that of younger people.

Rias managing director Janet Connor said: “There has been a longstanding public stereotype that the over 50s take more from society and the state than they put in. However, this is just not true.”

Those who are younger may find their spending rises by less because some of the items they are more likely to use their money for – such as children’s clothing – are not subject to the tax.

Chancellor Alistair Darling claimed in his recent pre-Budget statement that the reduction of VAT to 15 per cent in 2008 had helped save consumers £11 billion.

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