Families are set to be hardest hit by proposed changes to tax and benefits in the Chancellorís Budget on 21st March, according to the Institute for Fiscal Studies.
If your household is struggling to make ends meet in the face of rising living costs, and are getting into more debt as a result, you can compare debt solutions with Money Expert.
The Institute for Fiscal Studies (IFS) has said that the tax and benefit reforms for the coming financial year amount to a net ëtakeawayí of more than £4 billion.
This then rises to almost £10 billion the following year, once the full-year effects of changes to fuel duty and Child Benefit are felt.
ìAs the Chancellor weighs up possible new announcements for his Budget in a fortnight’s time, a key consideration will doubtless be the outlook for household incomes,î said Robert Joyce, a research economist at the IFS.
ìNew tax and benefit measures to be introduced in the coming year as part of the Government’s deficit reduction efforts will, unsurprisingly, reduce household incomes on average. The major demographic group who will lose the most from this set of reforms is households with children.î
The changes will cost households an extra £160 this year, rising to £370 the year after. These hikes will be felt the most by households at the low end of the income scale, and those with children.
Pressure groups have hit out at the government for its ëunfairí deficit reduction, saying it is penalising those who are already struggling.
ìThe IFS figures show the cuts have been family-loaded, hitting struggling families hardest and throwing 400,000 more children into poverty by 2015,î said Alison Garnham, Chief Executive of the Child Poverty Action Group.
ìBy hitting families and putting children into poverty the Government is not cutting the deficit in a sustainable way, and is instead creating a costly social and economic mess for future governments to clean up.î
You can compare debt solutions with Money Expert.