NEARLY 60,000 more Scottish pensioners than first thought will be hit by the Coalition Government's decision to freeze age-related personal allowances.
New Treasury figures show that 423,000 pensioners will be impacted by the so-called granny tax by 2015-16 in Scotland.
Last month, David Mundell, Conservative MP for Dumfriesshire, Clydesdale and Tweeddale and Parliamentary Under- Secretary for State for Scotland, said 367,000 would be affected by the decision.
The figures have shocked Age Scotland who have called for the so-called "granny tax" to be scrapped.
Labour MPs are concerned the changes will cause serious financial issues to pensioners in Scotland as well as across the UK and have been pushing for it to be ditched.
The figures were produced following questions from Scottish Labour MPs Cathy Jamieson and William Bain who say the pensioners will face average income tax hikes of £83 a year by 2015-16.
An Age Scotland spokeswoman said: "We disagree with the granny tax because it means Scottish pensioners will be worse off. The fact more pensioners will be affected is even more negative. We don't think the Government should go ahead with it because we just don't think it is right."
Under the proposals, the age-related allowances for pensioners will be frozen, starting in April 2013.
Given inflation of 3.5% and possibly rising, this may see more than four million pensioners across the UK having to pay up to £3.3 billion more in tax.
The proposal was outlined by Chancellor George Osborne in his recent Budget, but at the same time he cut the top rate of income tax for the 1% of people earning more than £150,000 from 50% to 45%, saying it would cost the Treasury just £100 million.
This led to accusations he was turning to pensioners to fund tax cuts for the rich.
However, Mr Osborne claimed he would be taking five times as much from the wealthy by capping the amount they can write off for charitable donations and imposing stamp duty of 7% on homes worth more than £2 million.
Cathy Jamieson, MP for Kilmarnock and Loudoun and Labour's Shadow Treasury Minister, said she was shocked by the latest figures and called on the Chancellor to ditch the granny tax.
She said: "Scottish pensioners who have worked hard all their lives for modest second pensions to top up their state pension will be outraged that an additional 60,000 people in Scotland will be hammered by George Osborne's Granny Tax by 2016.
"This Tory-led Government is completely out of touch, choosing to give as many as 18,000 top rate taxpayers a tax cut worth £10,000 a year while pensioners will pay on average £83 more each year.
"This is not fair, and shows that the Tories can't be trusted to manage the economy. They were warned they were making the wrong choices and sadly thousands of people are suffering cuts to their weekly incomes."
Shadow Scotland Office minister William Bain added: "It is unbelievable that the Tory-led Government thinks it is right that pensioners should be made worse off in order to make the wealthy even richer."
A Treasury spokesperson said: "It is sensible to have a single tax-free personal allowance for everyone, especially when we have just announced the largest-ever cash increase.
"Nobody will pay more tax in cash than they do today.
"The poorest half of pensioners are unaffected by this change and will still pay no tax in 2013-14.
"In addition, all pensioners will benefit from the basic state pension rising by over £5 a week, the biggest-ever cash increase."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article