Household bills ‘set to soar’
Household bills could shoot up by £5,000 a year for the next eight years due to the combined effects of rising public debt and an ageing population, according to PricewaterhouseCoopers.
Based on recent Budget projections, PwC’s economists said tax increases or public spending cuts of around £115bn-£133bn will be needed each year until 2018 to get UK public spending back on an even keel.
That could translate to an average cost per household of between £4,600 and £5,300 every year.
Philip McDonagh, PwC’s chief economist in Northern Ireland, said: “Even if action is taken now to get public debt back to historic and manageable levels before 2050, it will cost an additional £30bn per annum.
“But delay beyond 2018 and the cost of reducing public debt soars, leaving a generation of taxpayers beyond 2030 with a permanent £53bn annual burden to balance the public books.
“Successive governments may even have to consider raising the retirement age to keep workers in work and reduce pressure on the public purse.”
Northern Ireland has the highest proportion of the UK’s working age population that are neither in work nor looking for work.
In addition, the region also needs around £7bn a year from Westminster to make up the difference between what it spends and what is raised in taxes.
April’s Budget delivered an additional £116m to Northern Ireland under the Barnett formula, but PwC said this was more than wiped out by £122m of efficiency savings in local public sector expenditure.