£8bn VAT bill may mean equity release

Britain's pensioners face an £8bn bill to pay for the government's VAT rise, according to the Labour party and may need equity release to pay for it.

Researchers calculated that pensioners would hand over £400m in extra VAT from January, with the bill rising to just short of £8bn (£7.98bn) over the course of this parliament.

Labour are using the figures to push for amendments to be added to the Finance Bill in order to compensate the over 65s.

Shadow Treasury Minister Liam Byrne remarked that: "the scale of the attack of Britain's pensioners is now clear" and accused the government of using "gimmicks to disguise the real price" that OAPs will have to pay when VAT goes up.

Homeowners who are worried about extra expenditure could get a drawdown lifetime mortgage.

This form of equity release provides a steady stream of finance from the owner's house.

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