HOUSEHOLDS will be left £400 worse off this year as Rachel Reeves’ tax blitz piles pressure on family finances, economists have warned.
The Resolution Foundation think tank today said a triple hit of tax hikes, soaring utility bills and benefit squeezes will create a “historically bleak” outlook for living standards.
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A prolonged freeze on personal tax thresholds will push more earners into higher tax bands, while the employer National Insurance hike is expected to stifle wage growth, hitting take-home pay.
The Resolution Foundation found that these tax policies alone will drain £170 a year from the average household’s income.
Meanwhile, rising council tax and utility bills will see the typical household shell out an extra £80 annually in England.
Above-inflation water bill hikes will be even harsher, with average costs surging by £120 a year.
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Adam Corlett, Principal Economist at the Resolution Foundation, said: “The new tax year has arrived, bringing higher taxes, even steeper bill increases, and benefits that fail to keep pace with the rising cost of living.
“The typical household is now projected to be £400 worse off this financial year due to a toxic combination of weakening wage growth, escalating housing costs, tax and bill hikes, and benefits failing to outstrip inflation.”
The Chancellor has refused to rule out future tax rises but vowed not to repeat the bombshell raid of her first Budget.
Reeves said last week: “If we go further and faster on delivering economic growth with our planning reforms, with our pensions reforms, with our regulatory reforms, we can both grow the economy and have more money for our public services. And that is what I’m focused on.”
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