George Osborne has revealed the outcome of the Government's comprehensive spending review and outlined the measures that he believes will help Britain to 'step back from the brink'.
With a budget deficit costing the UK £43 billion a year in debt interest, the Chancellor said the road over the next four years would be hard, but that those with the broadest shoulders, including the banks, would pay the most.
Standing out amongst the reforms is an increase in the state pension age for both men and women to 66 by 2020, four years earlier than originally planned.
The Chancellor said that the age will gradually begin to rise from 2018.
Meanwhile, Equitable Life policyholders were told that they can expect to receive compensation payments amounting to a total of £1.5 billion, starting from next year.
A special mention was made of those savers who had with profit annuities, who will receive full relative compensation for their losses.
The banks will have to wait until tomorrow to find out the exact details of a permanent bank levy that the Chancellor said is to be introduced.
Mr Osborne said that he did not want to drive the banks abroad, given the amount of people they employ, but added that the Government did not want to 'let banks off' either.
The Treasury has put aside £1 billion of funding for the green investment bank, details of which are to follow.
Reductions in waste and administration costs are expected to see overall 'Whitehall' savings of £6 billion, double the amount that had been expected
It was confirmed, however, that 490,000 public sector jobs are likely to be lost over the next four years.
Welfare reforms are expected to save £7 billion a year, with a new universal credit pencilled in to replace benefits and tax credits over the next two parliaments.
A new time limit is to be applied to incapacity benefit claimants, while there will also be changes to jobseeker's allowance, housing benefit, council tax benefit, pension credit and family tax credits.
Mr Osborne confirmed that the payment of child benefit to high rate taxpayers is to be stopped, but said that no further changes would be made.
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