PBR measures get mixed response

10/12/2009

The Pre-Budget Report (PBR) has received a mixed response from consumer groups.

Responding to the report, which was delivered by chancellor of the exchequer Alistair Darling yesterday (December 9th), Which? said that tougher bank regulations should be imposed in future.

However, Citizens Advice, a financial charity, welcomed news that the organisation would receive £5 million of new funding through the PBR.

Mr Darling announced measures for the report including a one per cent rise in National Insurance for many workers from 2011, a reversion of VAT to the old rate of 17.5 per cent from next January and a one-off 50 per cent tax on banker bonuses exceeding £25,000, which will be paid by the banks themselves.

The state pension is also to increase by 2.5 per cent from April 2010 and eligibility for working tax credits will be extended.

David Harker, chief executive of Citizens Advice, said: "Even before the recession began there was considerable unmet need for our services, and rising unemployment since has seen that demand increase greatly.

"The £5 million of new funding announced today will allow the Additional Hours of Advice project - as it is known - to be extended into the new financial year and will enable us to help significantly more people."

Also commenting on the PBR, Phil Jones, personal finance campaigner at Which?, added: "The chancellor has promised to get tough on bonuses, but now he must listen to people and make real changes to the banking sector by putting consumers at the heart of reform."

Kevin Still, EuroDebt director, also commented on the PBR measures.

"More than ten million consumers will pay more National Insurance from 2011 after changes announced in the pre-Budget report and interest rates are likely to start increasing putting a financial strain on a significant proportion of the population," he said.

"Middle class families are increasingly being impacted and we are seeing more homeowners and higher earners struggling to pay their debts, both unsecured and secured, like their mortgage. Pay freezes and reduced working hours are likely to put both pressure on many families. High cost borrowing is not likely to be the solution and there appears to be a growing number households having to use credit cards and store cards to make ends meet on a short-term basis. We expect to see a rise in demand for money and debt advice."

Tags; Current UK Economy, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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