Families prepare to tighten belts in tax shake-up
FAMILIES in Peterborough are preparing to tighten their belts as they begin to digest the implications of yesterday’s budget.
In a welfare shake up which will save the country £11 billion by 2014/15, families and pensioners in Peterborough face reductions in tax credits for families earning more than £40,000, cuts in pregnancy grants, a three-year freeze on child benefits and reform of housing benefit.
However, personal income tax allowance will be increased to people earning less than £7,475, the basic state pension will be linked once more to earnings from April next year – with the pension guaranteed to rise in line with earnings, prices or 2.5 per cent, whichever is the greater.
Debbie Stopford (47), of Herne Road, Ramsey St Mary, believes the emergency budget was fair and will affect people across the board.
However, it means the single mum-of-six, who is recovering from womb cancer and is unable to work, will have to cut back on luxury items.
She said: “This budget has hit everybody. But I don’t think it is too different from any other budget and just means that once again we will have to cut back.
“The VAT increase is going to hit us as a family hardest because it affects everything.
“Children want the latest hi-tech equipment and gimmicks but they won’t be able to, there will have to be compromises. I think we will manage.”
However, she said it would be difficult for many families, adding: “I am not on the bread line but there are a lot of families out there who are, so it is going to be an uphill struggle for a lot of people.”
Pensioner John Kemmery (66) of Walton Park, Walton, Peterborough said the VAT hike will affect him and his wife Sheila and believes their pension increase will be eaten by the VAT rise.
He said: “In all the governments I have known, I have never known one to give anything to pensioners and this coalition government is no different.
“Pensioners are going to be a little better off but there is a large hike in VAT.
“They are giving it to us in one hand and taking it off of us in the other. The VAT increase is certain to swallow up any extra money we thought we might have.”
There will be no new increases in duties on alcohol, tobacco or fuel and Labour’s plan to increase the duty on cider by 10 per cent above inflation will be scrapped.