Mixed News For Families In The Budget

Mixed News For Families In The Budget

The Conservative and Lib Dem coalition government announced its first Budget yesterday - so are families winners or losers?

Well, all families will be affected by child benefit being frozen for three years - it won't even go up with inflation so will mean less in real terms.

Families earning more than £40,000 a year will also lose out, with child tax credits being limited to those families earning less than this.

Everybody will be affected by the increase in VAT, with estimates that this will mean we pay out £500 more a year, and anyone who works in the public sector and earns over £21,000 will get a two-year pay freeze.

However, the Independent reports that a couple earning £25,000 or less with two children are the biggest winners - they will be £17 a month better off due to the changes in this tax year.

Single people earning £20,000 or less with one child will also be better off by £12 a month, according to the Independent's figures.

From next April, couples with two children where one person is earning £10,000 will be £79 better off, says the Independent.

And there's good news for couples earning a total of around £25,000 with two children, who will be better off by £76 a month.

Very high earners - those bringing in £125,000 or more - will be worst off during this tax year.

In the next tax year there are likely to be 700,000 people who will pay 40% tax for the first time, as the threshold is due to drop by around £2,500. So if you earn over £41,000 you could move into this band.

Middle income families where both earn will start to lose out if their joint income is over £50,000 - they'll be £18 a month worse off from next April, according to the Independent.

But bizarrely, if they earn £60,000 they will be £19 a month better off.

Confused? You won't be the only one...

Source: The Independent

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