SWINDON financial adviser Sean Wilson says George Osborne's Budget will affect everyone in the town.
Sean, of independent financial advisers Money Swindon, said: “As predicted the emphasis is on spending cuts rather than raising taxes, with 80 per cent coming from public spending cuts and 20 per cent by increasing taxes.
“The biggest tax increase is a massive hike in VAT to 20 per cent. Everybody will pay more when they purchase goods or services. This will mean less money is circulating in the economy.
“Public spending will be slashed, with 'unprotected departments' losing 25 per cent in real terms over the course of five years.
“The worst hit will be those working in the public sector and those not in work and claiming benefits. Public sector workers will face a pay freeze, except those on lower incomes, for two years. Importantly, there will be a review of public sector pensions, in which it is predicted pension benefits are to be slashed.
“Welfare benefits will only increase using the lower rate of inflation, the CPI. Additionally, there will be big reductions in housing benefit and, worryingly, disability living allowance."
Sean welcomed some areas of the budget, however.
“The increase in the amount you can earn before being taxed to £7,475 next April will help people on low and average incomes, which means 880,000 low paid workers will not pay income tax," he said.
"This counteracts VAT by putting more money in people’s pockets. Bringing forward previously announced plans, linking of state pension increases with average earnings is another good measure.
“Savers and investors will need to take professional advice on whether they will be hit by the increases in Capital Gains Tax of up to 28 per cent. The 50 per cent tax band remains and richer individuals may also see further reductions in pension tax relief. More money will be raised in a bank levy.
“A lot of controversial measures were introduced today. Expect more to come in the spending review on October 10, when further details are released. The key question is whether the cuts and tax increases will slow down the economy.”