The government's plans to increase VAT to 20 per cent in January 2011 are likely to have an impact on the finances of poorer people in particular, it has been suggested, which might affect those who have products like
poor credit credit cards.
As a result of this, shopping around will become increasingly important, the
Consumer Focus chief executive Mike O'Connor believes.
He stated: "The VAT rise will hit the poorest consumers hardest as people who earn least already spend proportionately more of their income on VAT."
The expert went on to note that those on smaller incomes might sometimes struggle to benefit from the likes of direct debit deals that could save them money.
Chancellor George Osborne outlined his Budget proposals in the House of Commons in a speech yesterday (June 22nd).
Along with measures such as the VAT rise, the minister confirmed that tax credit eligibility is to be reduced in the future, with the threshold being lowered from £50,000 to £40,000.
Posted by Tom Burroughs.
