Income

Cost of living: Low-income couples could get a £2,500 boost in the emergency budget this Friday

Low-income couples could get a £2,500 boost in the emergency budget this Friday

  • Couples could save thousands from new plan if announced on Friday
  • Friday’s emergency budget will also reverse the National Insurance hike
  • Chancellor Kwasi Kwarteng will also remove the cap on bankers’ bonuses

Millions of low-income couples could benefit from a £2,500 boost to Chancellor Kwasi Kwarteng’s emergency budget on Friday.

A plan proposed by Liz Truss would see the transfer of all personal tax allowances between married couples and civil partners when earning less than £12,570.

This means low-income couples can send £1,260 in allowance, saving £214 in tax – a figure that could be multiplied by ten, the Sunday Mirror has reported.

However, Kwasi Kwarteng may delay the move until the full budget is announced later in the year.

Kwasi Kwarteng will present an emergency tax cut ‘mini budget’ this Friday to deliver on Liz Truss’ leadership campaign promises

This week’s emergency budget will see Rishi Sunak’s National Insurance increase, freeze corporation tax and scrap the cap on bankers’ bonuses.

The chancellor is also expected to detail how the government will fund the planned £2,500 cap on energy bills over the next two years.

Jon Hickman of BDO UK Auditors told the Sunday Mirror: ‘The sweeping tax cuts proposed by Truss will leave big holes in public finances.’

Removing the National Insurance hike and the corporation tax freeze will cost the public treasury £30billion alone.

It is also suggested the minimum wage could be raised to £10.50, although unions have said it should rise to £15 an hour.

TUC boss Frances O’Grady said: ‘Tax cuts will do nothing to revive the economy.

“Those who profited from this crisis should pay a fair share – with a higher windfall tax on oil and gas giants and new wealth taxes.”

Pensioners are set to get an increase of at least 10% next year with the return of the triple lockdown, meaning pensions will be increased in line with inflation.

Helen Morrissey, from Hargreaves Lansdown, said pensions are ‘on line for a record rise as long as the government delivers on its commitment to the triple lockdown’.

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