Budget tax increases that could be unveiled in chancellor Alistair Darling’s announcement tomorrow (April 22nd) may have an adverse effect on households already struggling with debt management, it has been claimed.
Sharon Bratley, a chartered financial planner for Fairinvestment.co.uk, noted that taxes on items such as cigarettes and petrol are likely to go up to fund the amount of money borrowed by the government in its efforts to tackle the economic downturn.
“Public debt and spending has spiralled out of control and the only feasible way to end this is to increase taxes in some way,” she commented.
It comes after research from the site found that 63 per cent of UK adults are seeing their finances become stretched in the wake of the credit crunch.
Ten per cent of this group said that they are having difficulties meeting mortgage repayments.
Meanwhile, figures from Key Retirement Solutions have shown that many older people are repaying mortgages into their twilight years, with the average over-65 owing Â£43,069 on a home loan.
By Jamie Price