Despite the fact the Budget was announced over three months ago, some people are still unsure of just how it’s going to affect them financially. While everyone’s circumstances may be slightly different, these are a few announcements made at the Budget that will affect many of you.
Firstly, let’s look at income tax. There’s some good news for low and middle earners, as an increase to the annual personal allowance (the amount you can earn before you are taxed) is set to rise to £9,205 in April 2013 for everyone. Adjusting for inflation, this represents an extra £170 a year. Meanwhile those of you who earn over £150,000 annually also have good news – the top rate is set to fall from 50 to 45% in April 2013.
For too many people, however, the news of increased personal allowances is irrelevant because of the high levels of unemployment. During the Budget it was announced that the OBR (Office for Budget Responsibility) expected unemployment to rise to a peak of 8.7% before than falling to 6.3% by 2016-17, which should at least provide some encouragement for young jobseekers.
Things may be as equally gloomy at the other end of the scale as pensioners will find their pockets squeezed ever so slightly. This is because their larger personal income tax allowance is being gradually phased out to bring them into line with people of working age. While the Chancellor,, has stated the change will not affect people in cash terms, it’s predicted that from 2013-2014 the average pensioner will be £83 worse off when inflation is taken into consideration.
If you’ve got children and you’re a high earner you could see your child benefits reduced or removed completely. If someone in the household is earning over £50,000 the benefits will begin to fall by 1% for every £100. Households with someone earning over £60,000 – that’s 10% of families – will not be entitled to any child benefits. In this situation, two parents earning just under £50,000 will end up comparatively better off than if just one parent works and earns over £60,000.
If you enjoy a cigarette break at work you can look forward to duty rising 5% above inflation. That means if you smoke a pack of cigarettes a day you’ll be puffing away an extra £100 a year. There’s mixed news for those that enjoy a pint or two after work – no changes to the plans that put duty increases at 2% above inflation means you’ll ‘only’ have to pay about an extra 5p a pint. If you drink around 10 pints a week that’ll work out to an extra £26 paid a year.
Drivers had cause to groan at the Budget as a 3.02p per litre increase set to come into force in August was given the go-ahead. That would’ve meant that if you’d usually spend about £60 a week on petrol – something you can easily do if you’re driving to and from work – you’d be losing out on just under £45 annually, without even taking rising oil prices into consideration! The increase in these prices has been delayed until January 2013 though – a minor consolation, but I suppose you shouldn’t look a gift horse in the mouth.
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