Almost everyone in the country will lose out directly or indirectly through the increase in insurance premium tax that comes into effect in November. Experts reckon it will add around £20 to the average motor policy and £12.50 to a typical home insurance.
Meanwhile, far from benefiting from the introduction of the new £7.20 national living wage, Barnardo’s reckons struggling families will end up £1,200 a year worse off – or £23 a week – because of the tax credit cuts announced in the Budget.
At the other end of the earnings spectrum, entrepreneurs will be hit by the changes to dividend income taxation. Those with profits of £100,000 could see their annual tax bill increase by more than £3,500.
Those lucky top earners with incomes of £210,000 and above will be hit by the cutting back of pension tax relief to basic rate level. They could lose up to £13,500 a year through the measure.
On the other hand, all taxpayers will benefit from the increase in the personal allowance to £11,000 from next April, although basic rate taxpayers will save only around £90 a year. Higher rate taxpayers will pocket an extra £150 or so.
So, of the case-study groups featured here, which ones have done best and which have done worst out of the Chancellor’s Emergency Budget measures? If you’re earning £20,000 a year and are a single person or unmarried couple with one child, or a married couple with two children, you’re facing a comparatively massive squeeze of £171 a month from next April. That will leave you £2,052 a year worse off, a 10 per cent drop in your annual income.
If you have two children but earn £25,000 a year, you’re facing a similarly savage 10 per cent income reduction from 2016. Our calculations suggest you’ll be worse off by up to £200 a month, or £2,400 a year, from next April.
So what about winners? There are a few small gains which, in general, rise the more you earn; but the biggest winners from our groups of people are married pensioners who were born between 1938 and 1948 and who have an annual income of £150,000-£175,000.
If that’s you, then you can look forward to an increase in your income from next April of £34 a month. That works out as an extra £408 a year which, frankly, probably isn’t going to make that much difference to your standard of living!
The only other groups here who are likely to do as well from next year are unmarried childless couples earning £150,000-£175,000; these couples will be better off by £32 a month, or £384 a year.
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