BOLTON pensioners will pay out more than £100 extra per year because of the recent increase in VAT, a local MP has claimed.

David Crausby, MP for Bolton North East, has raised concerns about the effect of the recent Value Added Tax increase on the welfare of pensioners.

From January 4, VAT increased from 17.5 per cent to 20 per cent.

According to a new analysis of the Government’s plans for this year, pensioner households will be paying at least £106 more in VAT than they will receive from other changes, such as a proposed increase in heating payments.

Mr Crausby said: “The VAT rise will hit pensioners on fixed incomes very hard and none of the Government’s policy announcements come close to preventing it.

“This Government can’t pretend that they are protecting the elderly when they are going to leave them significantly worse off in 2011.”

The research shows that the rising cost of living is just one factor that could be detrimental to the living standards of pensioners in the year to come.

According to the Fabian Society and Landman Economics, pensioners are estimated to lose public services which will equate to an 11 per cent reduction in their standard of living.

But Chancellor George Osborne has insisted the VAT rise is “fair”. He added: “The VAT rise is a tough, but necessary step towards Britain’s economic recovery.”