In four months' time the effects of not indexing personal allowances for the second year running will begin to be felt. The cut in tax relief on the married couple's allowance from 25 to 20 per cent and the 1 per cent rise in National Insurance contributions will also begin to bite.
On an anual income of pounds 7,000, a single person will be nearly pounds 1 a month worse off, while a married person claiming the whole of the couple's allowance or a single parent will see a drop of pounds 5.38.
On pounds 15,000, the single person will be pounds 7.64 a month worse off, while the married person will lose nearly twice as much - pounds 14.81.
At pounds 25,000, with both married and single people suffering the maximum cut, the single person loses pounds 17.68 a month and the married person more than twice as much - pounds 46.34.
It looks as if the the married couple's allowance, a hangover from the transition to separate taxation, will be whittled down like mortgage tax relief. It moves from 25 per cent to 20 per cent in April, and then to 15 per cent in April 1995.
Stephen Dorrell, financial secretary to the Treasury, said people were 'being treated like adults' in being given advance warning of the reductions. But he stopped short of confirming that the relief would go eventually.
Homeowners will also see mortgage tax relief drop from 25 to 20 per cent in April, which will cost those with loans of pounds 30,000 or more pounds 10 a month. A further cut to 15 per cent comes the following year.
The new 3 per cent tax on insurance could cost pounds 12- pounds 18 on household insurance, pounds 15 on car insurance, plus pounds 3 on AA or RAC membership, pounds 3 on travel insurance for the annual holiday, a few pounds extra on warranties for household goods and pounds 30 on private medical insurance. It will also increase the cost of mortgage indemnity insurance. This could all add up to around pounds 75 a year.
The change to an equal pensions age, which will affect women now under 44, will probably result in pension providers persuading women to save hard for their retirement so they can still stop work at 60.
The age at which women should opt out of the state earnings-related pension is being rethought as a result of the change. Steve Bee, pensions manager at Prudential, says women in their thirties are probably better off staying in for the time being. Previously the Pru advised them to opt out. But there is no rush to make a decision. Any change - in or out - before 5 April will be backdated to last April.
Elderly savers will get a new fixed-rate income bond from National Savings in the new year.
The Pensioners Guaranteed Income Bond, which is bound to become known as the Granny Bond, may annoy many grannies aged between 60 and 65, who will be barred from buying it. The common age limit of 65 has been set because National Savings is nervous of transgressing the Sex Discrimination Act.
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