Middle class families in England are set to lose around £4,000 per year following Coalition Government’s decision to ban child benefit for high-rate tax payers.
Along with the child benefits families will also have to deal with a loss of child tax credits, a rise in VAT and a rise in National Insurance. Families taking in around £50,000 in earnings will subsequently lose around £4,000, which could lead to a greater need to buckle their belts and watch their spending.
Some analysts fear this could be an even harder hit in the coming years, if the highest rate tax bracket was to fall even lower. Mike Warburton, a tax partner at Grant Thornton, said the Government had created a "toxic combination for families. People who are working very, very hard have a bitter pill to swallow."
This follows the news that UK households are already fearful for their financial futures, and that more are saving more money to account for potential road bumps down the line that may come with austerity measures and a damaged economy.