The Government's controversial decision to reduce the top rate of income tax from 50p to 45p has also been implemented. This is a move Labour claim will benefit 267,000 people on more than £150,000, including saving 13,000 people earning £1 million an average of £100,000.
Other changes include workers who earn above £41,450 paying the 40p rate. This change takes another 400,000 people into the higher bracket, making a record total of 4.3 million paying 40% tax.
The threshold for pensioners will rise below the rate of inflation, meaning 4.3 million retirees will be an average of £83 a year worse off.
Another change will see total benefits capped at £26,000 per household per year, roughly the average working income.
Shadow chancellor Ed Balls said: "David Cameron and George Osborne are today giving millionaires an average tax cut of £100,000 while they make millions of pensioners and working people on middle and low incomes worse off.
"Families with children are being hit hardest of all. For example, a one earner family with children will be a staggering £4,000 worse off on average this year because of tax and benefit changes since 2010. And this is on top of the income squeeze we have seen over the last three years as a flatlining economy has seen prices rise faster than wages.
He added: "These figures show the full picture David Cameron and George Osborne do not want you to see. They reveal that any gains ministers boast about from the rise in the personal allowance are swamped by higher VAT, cuts to tax credits and child benefit."
Treasury chief secretary Danny Alexander defended the changes, insisting that the Government was delivering big tax cuts for 25 million people.
He told Radio 4's Today Programme: "My priority as the Liberal Democrat in the Treasury has been to deliver as fast as possible the big income tax cuts for working people and overall to ask the wealthiest to pay more.
"The wealthy are paying more in every year of this Government than they did during the entire period Labour was in office."
