A DURSLEY pensioner has hit out at the Labour government for creating a tax-trap that is penalising him for wanting to work.

Stanley Gillard, of Dursley, claims that what he earns by continuing to work is being taken back in tax by an unfair loophole.

He said: "The Labour Party is a pain in the neck. What they give to pensioners in one hand is taken away with the other."

For pensioners, an annual income of £18,900-£23,070 (£23,310 for over 75s) is taxed at 33 percent and their savings at 30 percent, compared to the figures of 22 percent and 20 percent that apply both above and below that level.

Higher rate tax does not begin until income reaches £36,145.

Mr Gillard added: "I want to live that little bit better, but the only way to do that is to work 25 hours a week.

"That takes me over the £18,900 threshold and so I get taxed for bothering to go out and work.

"The government take my money off me and give it to lazy people and scroungers instead."

Mr Gillard also explained that there were other ways in which pensioners were losing out, criticising the pension credit system.

"The pension credit has cost millions of pounds to set up yet it doesn't make people better off," he said.

"I know of people who as soon as they have received their pension credit have had the money taken off their housing benefit instead. It's unbelievable."

With Gordon Brown failing to do anything about the tax-trap in his latest budget, Mr Gillard thought that he and thousands of other pensioners would make their feelings clear at the upcoming General Election.

He said: "I will vote for the party which is going to be better for pensioners and that isn't Labour."

Stroud MP David Drew admitted that it was a complicated situation where Mr Gillard was being taxed on his unearned income.

Mr Drew explained: "There used to be a real cliff face between tax rates of the working population and the retired, but the difference is being eased - up until recently it would have been a lot worse.

"At the moment the government is working on further ways of allowing pensioners to stay on in work without losing out.

"Personally, I would favour a system that allowed people to part-draw their pension while continuing to work, which would then reward them once they had fully retired."