Families hit hardest by tax and benefit changes

Families are set to be hardest hit by proposed changes to tax and benefits in the Chancellor’s Budget on 21st March, according to the Institute for Fiscal Studies.

The Institute for Fiscal Studies (IFS) has said that the tax and benefit reforms for the coming financial year amount to a net ‘takeaway’ 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.

“As 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,” said Robert Joyce, a research economist at the IFS.

“New 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.”

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 ‘unfair’ deficit reduction, saying it is penalising those who are already struggling.

“The IFS figures show the cuts have been family-loaded, hitting struggling families hardest and throwing 400,000 more children into poverty by 2015,” said Alison Garnham, Chief Executive of the Child Poverty Action Group.

“By 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.”

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Posted by: WarrenWilson Categories: Finance Tags: , , , 4 Comments

4 Responses to Families hit hardest by tax and benefit changes

  1. avatar Paul says:

    Osbourne and Cameron are running the economy like school boys (Etonian of course) conducting an ecomonics assignment…What they are doing to the country would be the same as everyone with a mortgage Just concentrating on paying their mortgage at the expense of at first clothes, food, and light and then finally cutting out transport to work costs so they ended up not being able to get to work and then of course not being able to pay the mortgage that they prioritised in the first instance..They are taking us all up an economic Cul De Sac…They arent worried as they, their Mummies, Daddies and “fwiends”probably all have offshore investments to hedge against the collapse of the UK economy. As for the NHS they claimed to want to lsten then arrogantly stopped listening when all the professionals involved told them they were wrong..God helps us all!!

  2. avatar Paul says:

    ps..has anyone else noticed the uncanny resemblance between David Cameron and the Harry Enfield Character”Tim Nice But Dim” or am I just being unfair:)?

  3. avatar karen says:

    While I think any cuts the government are doing are unfair, and they should look at their own pay scale first and then bank managers e.t.c who helped them put us in the mess to begin with, I feel That families, most I know, live well off on benefits and can run at least 1 car and go on holiday twice a year, something i cannot and i am working part-time self employed, i cannot even afford a car to run. Families where both parents dont work, or 1 might get child benefit for each child, child tax credit, then working tax credit, then free school taxis for children and not to mention all the other benefits, like council tax and free rent most times, sorry where is the hard ship of those, single parents may be worse off but couples with with children on benefits are not. Its not the single unemployed or disabled government should of gone after first but families on benefits not even trying to find work with all these benefits.

    • avatar Elaine says:

      I do agree to a point. However, we need to stop family allowance for more than the 2nd child. Why are we paying people to have children? Some people just keep reproducing to live off the family allowance. This country is already overrun we need to deter people from having children they cannot afford and educate people. If anyone should be paying for the mess we are in it should be the high earners of banking. Someone also needs to look into what Councillors are claiming for in expences as the MPs there is fraud going on in councils. The one thing that really does need looking at is how councillors are having council tax payers paying for their pensions, when some of us cannot afford to pay for our own.