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The Budget - Winners & Losers!


Home buyers

A "Help to Buy" scheme was announced. It will offer up to £3.5bn for shared equity loans towards mortgages.

Buyers who put up a 5pc deposit can get another 20pc from the Government. This loan will be interest-free for the first five years. There will be a ceiling of £600,000 on the value of properties bought.

Secondly, a "Mortgage Guarantee" scheme will be made available from January, which will incentivise lenders to give those with smaller deposits better mortgages There will be guarantees to back £130bn of mortgages.

The Government will guarantee 20% of the loan. Again, it will only be usable on properties worth up to £600,000. If a borrower's property is repossessed, the Government will cover a proportion of the losses suffered by lenders.

Basic-rate taxpayers

The personal allowance - the amount you can earn tax free before basic-rate income tax kicks in - will be raised to £10,000 from April 2014.

It follows several years of rises. For under-65s it was put up by £630 in the current tax year to £8,105 and is due to leap again to £9,440 next month, for the new tax year.

...and even higher-rate taxpayers

Mr Osborne made no mention of it in his speech, but it looks like higher-rate taxpayers will also benefit from the rise in the personal allowance.

Previous rises have been offset by changing the level at which the 40% income tax rate kicks in. It will fall from £42,475 for this tax year to £41,450 next year but will rise to £41,865 in 2014.

Beer drinkers

The alcohol duty escalator, introduced by Labour and so far retained by the Coalition, was scrapped on beer and duty was even cut by 1p from Sunday evening.

The decision has been taken against a backdrop of consumers being squeezed and sales of beer, much of which is brewed in Britain, falling. Also 10,000 pubs have closed in the past decade, the Chancellor said.

Child savers

Six million holders of child trust funds (CTFs) will be allowed to switch their money into the newer Junior ISAs (JISAs), which offer better rates and cheaper investments.

CTFs, set up in 2005 to hand at least £250 to all children born after September 1, 2002, were replaced in 2011 by JISAs. The decision means those child savings will be able to get access to a best buy account paying 6% interest rather than 3.05% and "index tracker" funds that cost 0.27% a year instead of the more typical 1.5% on CTFs.

Parents with children in full-time child care

A new system of tax breaks was outlined ahead of the Budget. In 2015, the existing scheme of child care vouchers will be replaced with a tax break of 20% on nursery costs up to £6,000 a year. The difference with the existing system is that higher-rate taxpayers get no additional benefit and that it excludes stay-at-home mothers. It is also paid per child.

Those with more children and using child care a lot will get the most benefit.


The "escalator", due to push up fuel duty again in September, was once again waived. The Chancellor said that petrol and diesel was now 13p per litre cheaper than it would have been if the escalator had been enforced over the past two years.

The previous Labour government scheduled annual inflation-plus-1% rises until 2014. But Mr Osborne cut 1p from fuel duty in the March 2011 Budget and announced in June last year that the rise due in August would be put off until the start of 2013. Once again, that 3p rise was postponed.

Investors in small companies

Stamp duty on buying shares on "growth markets", such as the junior Aim market, will be abolished. The duty is normally payable at 0.5% when buying shares.

Those who reach state pension age in 2016

Anyone who reaches state pension age between April 2016 and April 2017 will now benefit from the new single-tier state pension. Previously it was due in 2017, so these people would previously have missed out. Anyone who would have received just the basic state pension, currently £107.45 a week, will gain by qualifying for the £144 flat rate state pension.

Some would already have got that amount from the top-up state pension; they will not lose any benefits already accrued but will miss one year of extra top-up. The date change means around 400,000 more people will qualify for the single-tier state pension.

Equitable Life victims

Victims of the collapse of Equitable Life who had previously been denied compensation will now receive £5,000. Those on lower incomes will get £10,000.

The Chancellor described the payments as "ex gratia", saying the Government was under no obligation to make them but was doing the "right" thing. The recipients will be those who bought with-profits annuities before 1992. The £10,000 payments will be made to those who receive pension credit, a means-tested benefit.



Public sector workers

State staff were told to expect an additional year of austerity pay rises, with the 1% annual increases lasting until 2015/2016.

Wine drinkers

The "escalator", which raises duty on alcohol by a minimum of inflation plus 2%, was kept on wine.


The "vices" escalator was also enforced on cigarettes.

Annuity buyers

Mr Osborne said the Bank of England quantitative easing (QE) programme would continue. QE has depressed annuity rates by keeping gilt yields, on which they are based, low.

Members of final salary pension schemes

More workers could see their schemes close as a result of the Chancellor's decision to bring forward the introduction of the flat-rate state pension. "Contracting out" - which sees members of final salary schemes and their employers pay lower National Insurance contributions - will also end, so workers and companies will have to pay more. The extra cost could cause more schemes to close, experts say.

Employees in these schemes may see a reduction in their take home pay of £300 a year on average due to their increased National Insurance contributions, said PwC, the accountancy firm.

Low-paid workers wanting to join a pension scheme

All workers are due to be automatically enrolled in a company pension over the next few years - but only if they earn more than a specified amount. This amount is currently aligned to the personal allowance, which will rise to £10,000, so more people will be excluded from automatic enrolment, Sackers, the pension law firm, pointed out.

So you pays your money and takes your choice, but I think that the two Help to Buy schemes are going to make a huge difference to low-deposit buyers, and the housing market in general! Which, in turn, could make a significant difference to the growth rate in this country - only time will tell!

If you would like to know more about these schemes, or have questions on any of the other topics mentioned above, please do not hesitate to contact us!


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