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Government Mid-Term Review: childcare and pensions shake-ups coming

Simon Ward
by Lovemoney Staff Simon Ward on 07 January 2013  |  Comments 5 comments

The publication of the Government's Mid-Term Review document may not have revealed much, but important announcements are promised imminently.

Government Mid-Term Review: childcare and pensions shake-ups coming

The Government has presented its Mid-Term Review which, as the name suggests, marks the halfway point in this Parliament.

The review document itself is very light on detail and focuses primarily on previously-announced policies such as raising the personal Income Tax allowance to £10,000 and the launch of the Green Deal.

But there are several measures to come which will affect many of us and are expected to be unveiled properly over the coming weeks.

Pensions

“An improved state pension that rewards saving” is promised, but details were scant. However, the White Paper on pension reform, which includes plans to abolish the Second State Pension (formerly known as SERPS), might finally see the light of day. It’s been delayed twice, as it was first promised last spring, then by the end of last year.

Social care

This was a hot topic in the run-up to the Mid-Term Review. There are rumours that the Government will ignore the Dilnot Commission's recommendations to cap the cost of care at £35,000 and cap it at £75,000 instead.

In the event, all that was announced in the review document was “a Universal Deferred Payments scheme so that nobody will need to sell their home to pay for the costs of residential care in England”. There was also mention of the capping in the press conference but no details on how much the cap would be.

Childcare

There has been talk of the current childcare voucher scheme being replaced by tax breaks of up to £2,000 for working parents. There is no mention of this in the review document, but “supporting working families with childcare costs” has been mentioned on the Number 10 website and at the review press conference. We'll wait and see…

Flood risks and insurance

“We will invest more than £2.3 billion in flood risk management and we expect to exceed our target to improve protection for 145,000 homes by 2015, while also supporting flood-prone communities to access insurance.” At the moment, the negotiations between the Government and the insurance industry to renew the Flood Insurance Statement of Principles, which means insurance companies have to offer affordable cover to flood-risk homes, have stalled. We shall see what help will be offered.

FirstBuy mortgage scheme extended

The FirstBuy equity loan scheme for first-time buyers is to be extended, and the Government will continue to “champion the NewBuy scheme to increase the availability of mortgages on new build property”.

It’s not clear yet if the FirstBuy extension is in addition to the £280 million extra funding already announced back in September.

More on Government policy

Third of families set to lose Child Benefit have not been told by HMRC

Autumn Statement 2012: what it means for you

How to keep your Child Benefit

Benefit reform: all you need to know about the Universal Credit

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Comments (5)

  • ajrr1
    Love rating 19
    ajrr1 said

    Bengilda - you completely miss the point.

    We will not be able to afford for my wife to work without tax breaks of one kind or another, because we would actually be worse off after childcare and other expenses. £2,000 per year tax break would allow the following increased taxation paid to the government: -

    £3,500 - Income tax & NI payments by my wife.

    £200 (estimate) - Income tax & NI paid by the childminder we employ.

    You also need to add the following which I have not bothered to calculate: -

    Additional tax on fuel paid for travel to/from work & child minder.

    VAT on additional purchases made.

    For those who claim it - reduction in unemployment benefit paid out.

    The government (and hence indirectly you) would be better off as a result of paying this £2,000.

    It will create higher levels of employment, a greater sense of self-worth for those who are back in employment, and increase the flow of money.

    From a purely economic sense it's a win win and you'd be foolish not to support it.

    Report on 08 January 2013  |  Love thisLove  0 loves
  • coloratura
    Love rating 81
    coloratura said

    Cazbarfeatures is absolutely correct. As someone who has worked (and am still working) for 46 years and is of pensionable age, I am fed up with being told that the next generation are having to keep us. We have paid into the system via our taxes, national insurance etc for years and years. If Governments have squandered it then it is their fault and not ours. As a reward for our hard work we are now being told to keep on working until we are in our 70's/80's i.e. until we are put in a pine box., and before we get to that resting place they will ensure that "enjoy" our old age by withdrawing all the benefits (SERPS, free bus pass, winter fuel allowances, free TV license for the over 80's) that are not actually "FREE" because we have already contributed towards them.....and we are still paying our Income Tax, Council Tax etc. Then they say we are to get an improved state pension (£140 I believe) that "rewards saving". Well, as my pension, due to extra payments made is about £139, I don't think they will be giving me much extra and what will happen to the money I have saved....you guessed it, they will tax it at 40% along with the rest of my estate when I die (hardly a savings incentive).

    But let's look at what they have done for parents:- Well if you are two people earning £49,999 each you won't have any cuts in your child benefit (I wonder how many M.P's will benefit from this) but if one of you earns £50,001 they will lose it. How fair is that? I am afraid that this is one of the main problems with the country at the moment. Things are never fair and rip-off Britain rules as usual. We are one of the most highly taxed countries in the world and it is just getting worse and worse....but then perhaps those in power are really happy about it because they never seem to suffer. Yet another business has gone to the wall today (camera shops) - only the very rich businesses will survive and how can you run an economy with no businesses. People cannot spend on goods if they don't have the money. Henry Ford of "Model T" fame was once asked why he paid his workers a good wage and his reply was that they could then afford to buy his cars....now there's a man who knew a thing or two !!!

    Report on 10 January 2013  |  Love thisLove  0 loves

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