THE average worker will be £360 worse off next year even after Rishi Sunak’s tax breaks, economists warned today.
While the Chancellor’s new support package will help cushion the cost of living whack, experts say Brits will still be out of pocket.
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He used yesterday’s Spring Statement to cut fuel duty by 5p and raise the amount people start paying National Insurance.
Running the rule over the plans, the Institute for Fiscal studies said it would not be enough to offset the record plunge in earnings.
Boss Paul Johnson said: “It looks like a median earner on around £27,500 a year will be about £360 worse off in the next financial year than in the current year.
“Someone earning around £40,000 will be getting on for £800 worse off.”
Yesterday’s bleak economic picture said living standards were poised to plummet to the worst level since WW2.
Soaring inflation is expected to punch through the 7 per cent barrier, with wages struggling to keep up.
Mr Sunak also refused to hike benefits in line with rising prices to the fury of poorer families.
Mr Johnson said: “While benefit levels will catch up with inflation next year, that will be of little comfort to those budgeting week to week or to those who are unemployed this year but not next year.
“It is hard to understand the lack of action on this front.”
The IFS agreed with Mr Sunak that yesterday’s changes represented the biggest personal tax cut in 25 years.
But Mr Johnson also branded the Chancellor a “fiscal illusionist” for claiming taxes are being cut when actually they will rocket to the highest since the 1940s.
He warned “taxes are set to rise to their highest level as a fraction of national income since Clement Attlee was prime minister”.
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