Tax Increases to Hit Married Couples and Families Hard

A married man with two children earning £26,000 will be approximately £23 per month worse off after April, according to figures extracted from the Government by the Labour Party. The reduction in the value of the married man's allowance to 20 per cent and the one percentage point rise in employees' National Insurance contributions will also affect those earning around £46,500, with a nearly £45 per month decrease in their net income.

Families on average earnings will face a significant impact from the tax increases, with a two-child family expected to be more than £1,160 per year worse off. To mitigate the effects of these increases, individuals may need to reconsider their spending habits and explore ways to save money.

Key Takeaways:

• Married couples and families will face significant financial difficulties due to the tax increases, with a £23 per month decrease in net income for a married man with two children earning £26,000.
• The reduction in mortgage interest relief will cost someone with a mortgage of £30,000 approximately £10 per month.
• Remortgaging to a fixed or discounted rate can save up to £13.37 per month on a £60,000 25-year repayment mortgage.
• Conquering credit card debt is crucial, as even at the lowest rates charged on credit cards, borrowers will be paying up to three times the amount earned on savings.
• Discounts and special offers from credit card providers can offer savings of between £20 and £500 on holidays booked through major tour operators.
• Direct debts, such as subscriptions to magazines and clubs, should be reviewed and potentially cancelled.
• Company car drivers who drive more expensive cars will be hit hard by the move from April to tax cars on list price rather than engine size, with tax bills increasing by 23 per cent for a Vauxhall Astra 2.0i GSi owned by an executive driving 25,000 miles a year.

Statistics:

• A married man with two children earning £26,000 will be approximately £23 per month worse off after April.
• Someone with a mortgage of £30,000 will face an additional £10 per month in mortgage costs due to reduced tax relief.
• A £60,000 25-year repayment mortgage will cost approximately £415.88 per month at the variable rate, but £402.51 on a five-year fixed deal at 7.25 per cent.
• Conquering credit card debt can result in savings of up to £67.50 per year on interest payments.
• Discounts and special offers from credit card providers can offer savings of up to £500 on holidays booked through major tour operators.
• Direct debts, such as subscriptions to magazines and clubs, can be reduced by £10-£50 per month.
• Company car drivers will see a 23 per cent increase in their tax bill due to the move from April to tax cars on list price rather than engine size.

Sources:

• Labour Party
• Government of the United Kingdom
• Halifax Building Society
• Save & Prosper
• Barclaycard
• Arthur Andersen
• Pannell Kerr Forster
• Kingston Smith