Blog & Articles

Who will benefit from the tax break for married couples?

Date: 21. October 2013
Donald Hirsch and Matthew Whittaker

David Cameron’s announcement of a marriage tax allowance has attracted significant interest. The policy will make £1,000 of personal income tax allowance transferable between adults who are married or in a civil partnership, provided the higher earner is a basic-rate taxpayer and their partner is not paying income tax.

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How to ensure a rise in the personal allowance delivers on its promise

Date: 17. October 2013
Matthew Whittaker

Income tax cuts, or the promise of them, seem likely to play a big part at the next election. Having delivered on what was initially a Liberal Democrat policy to raise the personal tax allowance to £10,000, both sides of the coalition appear keen on further increases after 2015. For its part, Labour says it will re-introduce the 10p starting band if elected. Such policies come with sizeable invoices, but they form key strands of attempts to ease the squeeze on (and to appeal to) “hard pressed families”.

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Universal Credit: a missed opportunity to help older workers

Date: 1. July 2013
Giselle Cory

We know that many people want to work into older age – yet many do not. So what stops them? For some, caring for family or friends can make paid work near impossible. For others, their own poor health can be a barrier. And for families on low incomes, it may be that work simply doesn’t pay enough to warrant continuing. This can lead to trouble for families who don’t have the savings they need to maintain decent living standards into retirement.

Universal Credit (UC), the government’s flagship welfare reform, could address some of these barriers. For example, under UC low income households will receive an income boost designed to make work pay. This system could be powerful in ensuring older people have the incentives they need to remain in work. Yet a new report from the Resolution Foundation shows that while UC offers some benefits to older workers, it also misses an opportunity to raise older people’s incentives to stay in a job, or return to work. Without these incentives, low paid work simply does not add up.

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One size does not fit all: why Universal Credit needs to work for older people

Date: 28. May 2013
Giselle Cory

This blog originally appeared on the New Statesman

The shape of our labour market has altered dramatically in recent decades. Among the starkest changes is the increase in the number of older workers – from five million in 1992 to 7.5 million in 2012. One in three people of working age in the UK is already over 50 and the growth of this group will continue to far outpace that of their younger counterparts.

For many of these baby boomers, their working lives have coincided with good times of rising employment and a boom in assets like house prices. But it is naïve to think that all the boomers are now sailing into affluent, easy retirements. The UK has four million inactive or unemployed older people, many of whom might still want to work but are prevented by a mix of caring responsibilities, poor health, poor skills and the fact that there’s often no real financial incentive for them to do so. As a result, many people retire or drift out of the labour market without having been able to save all they need for a comfortable old age.

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The coalition's welfare cuts mean a dramatic rise in council tax for the poorest

Date: 31. January 2013
Matthew Pennycook

This article originally appeared on the New Statesman

The decision to reduce the budget for council tax support by 10 per cent means low-income households face a tax increase of up to £600.

Accustomed to the inflated claims of successive governments, readers might be forgiven for rolling their eyes at the phrase "radical welfare reform". Yet for once the bold rhetoric might match reality. Council Tax Benefit, the most widely claimed benefit in the UK, which provides 5.9 million low-income families with help paying their council tax will soon be abolished. From 1 April, responsibility for council tax support will transfer from Whitehall to each of England’s 326 local authorities (and the Scottish and Welsh governments). Few have yet grasped the full implications.

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The welfare debate is only just warming up

Date: 20. December 2012
Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Making out that cutting working-age welfare won’t hurt those in work is so divorced from reality that there was always going to be backlash. None of which is to say that Osborne’s gamble won’t pay off.

Powerful Chancellors often over-reach politically before a fall, or at least a bump. For Gordon Brown, it was the desire to cut the basic rate of tax to 20p which brought with it the abolition of the 10p tax rate and the debacle that ensued.

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childcare slider

Universal Credit: winners and losers

Date: 17. November 2011
Vidhya Alakeson and

This post originally appeared on the Public Finance blog

Iain Duncan Smith has found an extra £300m for childcare in his Universal Credit, but women who want to work longer hours will lose out. The result is only going to make households worse off

Earlier this month, the government announced the level of support that would be available for childcare under Universal Credit when it is introduced in 2013. This is equivalent to the support currently available to low-to-middle income families through the childcare element of the Working Tax Credit.

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