Budget fallout affects families and pensioners the most


An analysis by the Institute for Fiscal Studies has discovered that families with children and elderly citizens are the groups of people who stand to be hit the hardest by the Coalition Government’s austerity measures.

The Institute for Fiscal Studies is the country’s leading think tank for economic studies and they believe that new taxes combined with the VAT rise, up to 20 percent from 17.5 percent, will lead to families and pensioners being disproportionately affected. Households earning more than £40,000 a year will see their tax credits slashed.

While poorer families and the elderly will be affected the most, it seems as if no one is safe from the results of the budget. According to forecasts wealthier families, those earning £100,000 or more, will lose around seven percent of their income.

The report stated: “The biggest losers from the Budget are low income households of working age, while better off working age households without children lose the least. Low income pensioners are less affected than other poor groups from welfare cuts, but richer pensioners lose more than richer households of working age as they do not benefit from the increased (income tax) allowance”.