Recent analysis indicates that lower-income working families benefited the most from Rachel Reeves’ Budget, while wealthier retirees were impacted negatively. The Resolution Foundation economists discovered that the poorest households saw an average increase of £90 annually, while the wealthiest half faced losses of around £1,000. However, poorer pensioners experienced an average loss of £220, contrasting with wealthier pensioners who faced a £680 reduction due to Ms. Reeves’ policies.
By opting not to raise income tax by 1p, as previously suggested, individuals earning less than £35,000 will be worse off. Analysts noted that Reeves prioritized addressing the cost of living but postponed tax reforms, anticipating a challenging future ahead.
An immediate survey, exclusive to The Mirror, revealed positive reception towards the mansion tax and the removal of the two-child benefit limit among voters.
The decision to freeze income tax thresholds drew criticism towards Ms. Reeves, as it means individuals will pay higher taxes with increasing wages. The Resolution Foundation’s analysis highlighted that nearly all earners, except the top 10%, will be worse off due to this freeze instead of an increase in the income tax rate.
Additionally, it was found that three out of five families benefiting from the two-child benefit limit include at least one working individual. Approximately 560,000 families are expected to gain an average of £5,310 in the 2029-30 fiscal year as a result of abolishing the cap introduced by the Tories in 2017.
Ruth Curtice, the Resolution Foundation’s chief executive, emphasized the importance of Reeves’ Budget in addressing cost of living challenges, implementing sensible tax reforms, and managing public finances effectively.
The analysis also projected forthcoming austerity measures, with significant cuts anticipated for various government departments. The Foundation predicted substantial tax increases post-2029, with a focus on repairing public finances.
Regarding public sentiment, a rapid study conducted by 38 Degrees and JL Partners reflected strong approval for the mansion tax and the removal of the two-child benefit limit. The measures were praised by a significant portion of respondents across different political affiliations.
Matthew McGregor, CEO of 38 Degrees, highlighted the public’s desire for meaningful change that positively impacts their lives and the country’s future. Tom Lubbock, co-founder of JL Partners, noted the positive reception of the Budget measures among the public.