The 'Squeezed Middle'

The ‘Squeezed Middle’

Since the start of the cost of living crisis in 2022, we've regularly heard the term 'squeezed middle', but who are they? And what does this Budget mean for them?

According to the treasury minister, the term refers to those on a 'median income' - or between £25,000-£50,000 - and will usually fall outside the thresholds for most benefits offered by government.

Last year, Alex Allinson's Budget was heavily criticised for increasing the higher rate of income tax while not increasing the personal tax threshold - something critics claimed put even more pressure on those already struggling to make ends meet.

This year, some changes to those policies have been made. The higher rate of income tax has gone down from 22% to 21% while the personal tax thresholds have been increased by £250 for individuals and £500 for jointly assessed couples to £14,750 and £29,500 respectively.

Dr Allinson also believes investing significantly in child benefits - which has seen the eligibility change for the first time in a decade - and the childcare strategy will help support working families on the Island.

He admitted, however, that it's still not enough to offset the increased cost of living.

Speaking on Manx Radio's Budget Special programme, Dr Allinson was asked what this Budget does for the 'squeezed middle'.

He said one of the biggest stresses for people in this category is the cost of housing. 

While the treasury minister says government is working to increase housing provision and improve affordability, he's admitted it's something that will take time.

You can listen to Dr Allinson's comments in full here