Families will be an average of £891 worse off from next week because of tax rises and cuts to tax credits and benefits introduced since 2010, according to new figures.
Families will be an average of £891 worse off from next week because of tax rises and cuts to tax credits and benefits introduced since 2010, new figures suggest.
Changes to tax, tax credits and benefits since 2010 will mean that families are £17 a week worse off in the 2013/14 financial year, according to the figures published by the Labour Party.
Based on data published by the Institute for Fiscal Studies (IFS) in its Green Budget in February and its post Budget briefing earlier this month, the figures show the extent to which living standards are being squeezed by George Osborne’s policy of austerity.
Meanwhile, from 6 April, 13,000 people earning over £1 million will receive an average tax cut of £100,000.
The measures coming in next month include:
From Monday 1 April, changes to council tax and housing benefit will mean:
- 2.4 million families on low incomes will pay on average £138 more in council tax in the year 2013/14 as a result of cuts to council tax benefit, according to the Joseph Rowntree Foundation.
- 660,000 people will lose an average of £728 per year or £14 a week as a result of the bedroom tax, according to figures from the IFS.
From Saturday 6 April, changes in the new tax year include:
- the top rate of income tax will be cut from 50p to 45p. This will benefit 267,000 people earning over £150,000, including 13,000 people earning over £1 million who will receive an average tax cut of £100,000, according to figures from HMRC.
- child benefit will be frozen for a third year, while tax credits and other working-age benefits will be increased by just 1 per cent. These real terms cuts will affect 9.7m households, of which 7.3m (or 75 per cent) are working households according to the IFS.
- the personal allowance for those aged under 65 will rise to £9,440 but the higher rate threshold will fall to £41,450.
- changes to the age-related allowance – the so called ‘granny tax’ – will see 3.6m pensioners lose £68 a year and 360,000 people turning 65 this year lose £268, according to the IFS.