UK households to see budget slashed by £200
Households in the UK will see the annual budgets drop by another £200 because of the cumulative impact of tax increases and benefit cuts in the spring.
This could make it a good time to consider scrutinising personal finances and taxes, as some 750,000 are expected to be eligible for higher rate tax, according to the Institute for Fiscal Studies (IFS).
Even single parent families where the lone parent earns more than £40,000 will be affected, while high salary couples with two children who have an annual income of more than £100,000 will also see a notable drop in income.
However, some 500,000 will see an increase in their monthly pay cheque starting from the same period as they will be withdrawn from the tax system altogether.
Commenting on the changes, a senior research economist at the IFS James Browne said: "Further reductions in household income are inevitable as government policies aimed at helping to reduce government borrowing from its post second world war high are introduced."
Published on: February 3, 2011
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