The 2012
autumn statement has been delivered by the much maligned George Osborne, to a
largely mixed reception. However, it is not always immediately clear exactly
what the declarations of the jowl faced chancellor mean to the unique
circumstances each of us find ourselves in. Here is our simple breakdown of
just how the autumn budget will affect your finances.
For parents
Annual
increases in child benefit and tax credits, which are currently in line with
inflation, have been reduced to just one per cent. This means that as of April
2013, the real value of tax credits will decrease, as will child benefit as of
April 2014.
For homeowners
Mansion
taxes have been ruled out; music to the ears of traditional conservative
voters. Less well-off homeowners who are claiming income support, income-based
jobseeker’s allowance, income-related employment and support allowance or
pension credit will now be able to claim additional support for mortgage
interest until March 2015.
For savers
It’s
relatively good news for savers. The amount that can now be saved in a tax free
Isa has risen by £240, from £11,280 to £11,520 as of April 2013. And more good
news - the threshold for the 10 per cent tax rate on savings which is only
available to those on low incomes is being increased in line with inflation,
from £2,710 to £2,790 for next year.
For drivers
Thankfully
the planned 3 pence-a-litre fuel duty rise has been scrapped. With prices
having risen inexorably over the last couple of months, this will bring at
least some rest bite for commuters, families and haulage firms.
For first time home buyers
Despite the
struggling housing market, the chancellor chose not to make it any easier for
prospective homebuyers to take their first step onto the property ladder. Stamp
duty has not been altered and the Funding for Lending scheme has not received
any enhancements which will trickle down to first time buyers.
For pensioners
Pensioners
will experience a rise in their state pension entitlement of 2.5 per cent,
which is unlikely to keep pace with inflation. For those funding their
retirement through a pension drawdown, you will be free to take 20 per cent
more of your invested pension fund each year as of April 2013. On the surface
this seems like good news, although experts are concerned this may lead some to
spend their pensions too quickly.
For the employed
Those
individuals employed will not pay income tax on the first £9,440 they earn,
with the personal tax allowance rising by £235. However, the higher income tax
band is set to fall, which means anyone earning over £41,000 will have to kiss
goodbye to 40 per cent of anything they earn over this threshold.
For the unemployed
Unemployment
benefits are set to rise by 1 per cent, which is well below the rate of
inflation. In real terms, those on benefits will be worse off in the coming
years.
Author: Trust Deed Forum is a leading online
resource which provides those who are struggling to make ends meet with a
confidential and anonymous forum where they can pose questions to experienced
debt experts and discuss their issues with those who find themselves in a
similar financial position.
