How would you like to have an extra £700 in your pocket per year? Under new government proposals, this could soon be a reality.
Nick Clegg has proposed moving more quickly to increase the income tax threshold to £10,000.
The Deputy Prime Minister said that doing so would give back more than £700 to every person who earns under £100,000 a year.
Under the current income tax threshold, people only have to pay income tax if they earn over £7,475 per year.
The coalition government already plans to increase the threshold to £10,000 by 2015.
Boiling point
Mr Clegg has called for the increase to take place sooner because ‘pressure on family finances is reaching boiling point’.
‘There is now an urgent need to give families more help; an urgent need to rebalance our tax system so it rewards work and encourages ordinary people to drive growth,’ he added.
Wage growth dawdles
The pressure on finances that Clegg speaks of is partly to do with the fact that the increase in average weekly wages in the UK has slowed.
According to the Office for National Statistics, average weekly earnings grew by just 1.9% in the three months to November 2011, whereas they increased by 2.8% in the three months to July of last year.
Cost of living
While wages have remained largely the same, the cost of living has rocketed over the past year.
Recent research from insurance firm Aviva found that the biggest concern of 62% of families in the UK was the rising cost of living.
One of the major factors driving up household expenditure is the price of energy, with the average gas and electricity bill now being 21% higher than it was at the start of last winter – rising from £1,069 in November 2010 to £1,294 now, according to Consumer Focus.
Ten tips to reduce the cost of living
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1. Turn down your thermostat
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2. Use energy-efficient light bulbs
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3. Don’t leave your appliances on standby, turn them off at the socket
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4. Switch to paperless billing (some companies charge extra for paper bills)
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5. Shop around to find cheap home and car insurance quotes
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6. Look for two-for-one vouchers or special offers when eating out
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7. Cut down on some luxuries, like your daily Starbucks
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8. Walk or take public transport rather than paying for petrol and parking
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9. Make your own lunch rather than paying over the odds everyday
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10. Cancel expensive gym memberships and use the great outdoors