FinancialAdvice.co.uk Logo

Qualified advisers answering your
Financial Questions
call 0800 092 1245

Benefits cuts cost poorer households significantly

23/01/2015

Changes to taxes and benefits that the current government brought in have cost the average UK household £1,127 a year, according to the Instituted of Fiscal Studies (IFS).

Tax and benefit changes include increased in National Insurance Contributions, substantial cuts to benefits and an increase in the main rate of value added tax. Low income- working aged households were hardest hit, with middle-income working-age households without children gaining the most from the cuts.

The poorest households lost around 4% of their incomes. This is compared with around 3.5% for the next poorest tenth and between 2.5% and 0% for middle-income households. For the richest households, there was a loss of about 2.5% , whereas pensioners remained relatively unaffected.

London was the hardest hit region, with families losing on average £1,042. This was closely followed by south east England, the West Midlands and north west England.

James Browne, a senior research economist at IFS and co-author of the report said: "Whichever way you cut it, low-income households with children and the very richest households have lost out significantly from the changes as a percentage of their incomes.

"Increases in the tax-free personal allowance have played an important role in protecting middle-income working-age households meaning that those without children have actually gained overall."

Need financial advice?


If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.


Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:



Latest News

Blogs

Helpful new tax year facts that could affect you and your money


Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.


Read more

Useful Links

Popular Searches

Please Enter More Details

 
Enter More Details
Continue