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Pensioners and families ‘hit hardest by Budget measures’

 

The Chancellor’s Emergency Budget has hit pensioners and low income families the hardest, a leading economic think tank has claimed.

 

In a new report, the Institute for Fiscal Studies (IFS) argues that these two groups are set to lose the most in cash terms as a result of sweeping changes to the benefits system and the forthcoming increase in VAT.

 

According to their findings, George Osborne's tax and benefit reforms between June 2010 and April 2014 will cost the poorest 10% of households £422.83.

 

‘The biggest losers from the Budget are low income households of working age, while better off working age households without children lose the least,’ the analysis states.

 

‘Low income pensioners are less affected than other poor groups from welfare cuts, but richer pensioners lose more than richer households of working age as they do not benefit from the increased [income tax] allowance’.

 

The IFS concluded its report by asserting that the changes were ‘clearly regressive’.

However the Treasury said the Government ‘does not accept’ the IFS analysis.

‘It is selective, ignoring the pro-growth and employment effects of Budget measures - such as helping households move from benefits into work, and reductions in corporation tax,’ a spokesperson said.