The week in review
We look at this week's major news stories and how they affect our readers.
New Labour leader Ed Miliband has set about naming the members of the shadow cabinet – appointing Alan Johnson as shadow chancellor.
Ed Balls will take the role of home secretary and his wife Yvette Cooper was named as foreign secretary. Andy Burnham was appointed as shadow education secretary and Harriet Harman remains deputy leader.
Higher rate taxpayers lose child benefit
Child benefits will be cut for higher rate tax payers as of 2013, the government has announced.
George Osborne told the Conservative Party Conference that couples with one parent paying 40% or 50% tax will no longer receive payments.
At present, those earning £44,000 fall into this bracket. By 2013, however, the amount will be £42,375. Mr Osborne said the child benefit cut is set to save £1 billion.
In a move that has come under fire, families with two working parents each earning below the figure will not be affected – regardless of their combined income. Opponents argue this feature will unfairly penalise single parent families.
The Prime Minister has since issued an apology for not including this plan in the Tory election manifesto.
PM hints at married tax break
David Cameron has suggested the government may introduce a tax break for married couples during this parliament.
The policy had been part of the Conservative manifesto which promised to give basic rate taxpayers a tax break of £150. However, it is now thought the policy could extend to higher rate taxpayers.
Analysts have said the tax break could be an attempt to mollify high earners who will lose out on child benefit payments.
House prices in ‘biggest monthly drop since 1983’
Average house prices fell £6,000 in September, the latest figures from Halifax have shown.
Last month, the typical house price fell from £168,124 to £162,092. This represents a monthly drop of 3.6% - the largest since Halifax records began. Nevertheless, prices are 2.6% higher than the same period in 2009.
Halifax’s housing economist Martin Ellis said: ‘Renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase.’
Interest rates remain at 0.5%
The Bank of England has held interest rates at 0.5% for the 19th month in a row.
As in previous months, the decision had been widely anticipated by economists and analysts.
The Bank of England also confirmed that it will not be investing more money into its quantitative easing programme.
Public sector workers should 'pay more towards pensions'
Workers in the public sector should make a greater contribution to their pension schemes, a commission has recommended.
The review, led by former Work and Pensions Secretary Lord Hutton, is part of the government’s investigation into where savings could be made.
Lord Hutton recommended key workers such as nurses, firefighters and teachers should pay more into their pensions as the gap between the public and private sector is ‘fundamentally unfair’. He also suggested public sector pensions should shift towards career average, rather than final salary.
Union leaders have reacted angrily to the proposals and warn that workers could strike in protest.
Lord Hutton’s suggestions are the initial stage of the review and he is set to make further recommendations in 2011.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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