Ruth Jackson rounds up the most important reforms contained in George Osborne’s spending review.
• Men and women will now receive the state pension at the age of 66 from 2020. This hits women the hardest. Prior to this the state pension age was to be 65 for both sexes by 2020, with women seeing a gradual increase from 2018. The new rules mean that men and women aged under 57 on 6 April this year will have to wait until they are 66 to draw a state pension.
• The National Employment Savings Trust (NEST) will go ahead. It will involve automatic enrolment into pension schemes for all employed people.
• The maximum savings credit award in the pension credit will be frozen for four years. The working tax credit rules are changing, so couples with children must work 24 hours per week between them.
• Child benefits will be removed for any family where one parent is a higher-rate taxpayer. This means that a family with one parent earning over £43,875, or two parents earning over £87,750, will lose out on child benefits of £20.30 a week for the eldest child and £13.40 for every other child. The child element of the child tax credit is set to rise by £30 in 2011/2012 and £50 in 2012/2013
above indexation.
• The temporary increase in the cold weather payment is to be made permanent. Anyone on a low income can receive £25 for any week when the weather is forecast to be below freezing. Pensioners will continue to get free bus passes and over-75s will still get free TV licences. Train fares are likely to rise as the cap on regulated fares will go up to RPI plus 3% for three years from 2012.
• The ‘Sure Start’ programme (which helps with early education and childcare for young children) will be protected. Fifteen hours of free education and care will be offered for disadvantaged two-year-olds.
• ‘Warm Front‘, the government scheme for helping people improve domestic energy efficiency is to be phased out. The grants will cover the installation of insulation and heating improvements up to £3,500. If you receive some form of benefits, you probably qualify, so apply quickly.