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Brits should expect lower incomes regardless of election result


UK households should prepare themselves for lower incomes, no matter who wins the election, according to the Institute of Fiscal Studies (IFS).

Tax and benefit changes are set to leave the average household worse off, according to IFS. The think thank has accused all the major political parties of misleading the public when they pledge to access money through clamping down on tax avoidance. It claims all the parties have "a shared lack of any attempt to paint a coherent strategy on tax reform".

If the Conservatives gain power and implement £12 billion worth of social security cuts, they would need to cut benefits by 10%, the IFS said. The party’s plans to increase the personal tax allowance to £12,500 will not help the 44% of people who now pay no tax, but will simply benefit those in "the middle and upper middle parts of the income distribution".

Labours plans to introduce a 10% starting rate for income tax was also slammed by the IFS, who claimed it was pointless as it would only save about 50p per week for taxpayers. They also called Labours mansion tax “unnecessarily complicated” and said that Labour's plan to raise £1.2bn from the tax annually would mean that owners of properties worth more than £3m would have to pay around £16,600 a year each.

The IFS said:
“All the parties share a lack of willingness to be clear about the details" of forth-coming changes”

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