piggy bank 2

One in four British women do not earn enough to benefit from the latest rise in personal allowance, a trade union study has found.

The report by the Trade Union Congress (TUC), which was published on Thursday, found that while a quarter of women will fail to benefit, only one in ten men will be in the same situation.

One in six UK employees do not earn enough to benefit from the increase in the personal allowance and a further 333,000 employees, almost three-quarters of whom are women, will only partially benefit from the increase as they earn between £9,440 and £10,000.

The report says it has cost over £10 billion to raise the personal allowance from £6,475 in 2010/2011 to £10,000 this April. Personal allowance is set to rise by another £500 in April 2015.

TUC General Secretary Frances O’Grady said:

“Raising the personal allowance is one of the government’s most expensive policies, and most of its £10 billion cost is benefiting wealthy families, while those on the lowest incomes lose out completely.

“From this Sunday, a worker on £99,000 will get a £195 tax cut, while four million of the UK’s lowest paid workers will get nothing. This shows the government has got its priorities badly wrong.

“It is odd to see politicians fighting to take the credit for a policy that does so little to help hard-working families, and one which is also particularly bad at helping women.”

The report also shows that raising the personal allowance is failing to help working families on low to middle incomes in receipt of Universal Credit (UC) because UC is based on post-tax income.  This raises concerns that for many, two-thirds of any financial gain from the personal allowance will be taken away through reductions to UC.

Photo by Philip Brewer