Average British households could be £200 a year worse off due to benefit cuts and tax changes. IFS research has revealed that thousands of people will have to start paying more tax this April. About 750,000 people will become higher-rate taxpayers in April due to the government tax shake up leaving them £200 a year worse off, according to the Institute of Fiscal Studies (IFS). The new system means that three quarters of a million Britons will have to begin paying the higher 40% income tax rate on their earnings from 5 April when the eligibility threshold falls from £37,400 to £35,001. At the same time the level at which people start to pay tax will rise from £1000 to £7,475 a year. Both measures were designed to remove thousands of lower paid workers from the tax system.

More people are choosing to invest their money in stocks and shares instead of property. Property investment may decline as more people play the stock market. Long-term investment in property is losing popularity as consumers opt to place more of an emphasis on savings accounts, stocks and shares, according to the Association of British Insurers (ABI). The ABI's quarterly survey showed that 34% of the 2,500 participants saw property as the best long-term investment for the future, which is a 15% reduction from the figures recorded just three months earlier. This means that the number of people who favour placing their cash in property is now at its lowest level since the Association started its survey in 2008.

The spending cuts had to be implemented to secure economic sovereignty announced Nick Clegg at the Davos economic summit. Despite the contraction of the economy, plans made by the government will stay on course. The plans outlined in the government's Spending Review were not a "gamble", according to a speech made to the World Economic Forum by the Deputy Prime Minister yesterday. Nick Clegg said the deficit reduction plan was "measured" adding that program of cuts would take place over the course of the next four and a half years.

Tax mistakes could mean that the pensions of some British workers are docked. National Insurance shortfalls suggest that many employees may not have made enough payments for a comprehensive pension pot when they retire from their job. Millions of workers may not receive their full pension provision when they retire due to a National Insurance contribution error made by HMRC. Over 9.3 million NI payments were not matched correctly with employee records between 2004 and 2009, which means that some workers may fall short of the 30 year contribution requirement needed to attain a full pension.