Shrinking bills may be best way to overcome Budget changes

Thursday, June 24th 2010

British families may need to find ways to reduce their bills in order to cope with the implications of the new Budget.

Chancellor George Osborne this week announced a raft of changes that will have an impact on the financial situation of millions of Britons.

Among these was a rise in VAT from 17.5 per cent to 20 per cent and a freeze of child benefit.

Now, Moneymagpie.com says this could have a negative bearing for some UK parents struggling to pay the bills.

Jasmine Birtles, founder of the website, notes: "The freezing of child benefits in effect will mean that the effectiveness of child benefits will actually go down. How much depends on inflation, but it will certainly reduce their value."

Essential items and services could also cost more due to the VAT hike, meaning cuts in other areas - such as energy bills and food shopping - could be necessary.

Mr Osborne's Budget was the first of the new coalition government, which is led by David Cameron.