Yesterday, the Chancellor delivered his final Budget of this Parliament. The Budget included an update on the economic progress made over the last five years, with record employment, the deficit halved, higher living standards than when this Government came into office and the fastest growing economy in the G7, as well as a number of new policy announcements.
- A new Personal Savings Allowance to abolish taxes for 17 million savers. Millions pay tax on their savings even though they have already paid tax when they earned the money. From next year the first £1,000 of the interest basic rate taxpayers earn on savings will be completely tax free – taking around 95 per cent out of savings taxation altogether. The allowance is £500 for higher rate taxpayers.
- More freedom for pensioners over their savings. New pension freedoms will be extended to the 5 million pensioners who already have an annuity – meaning pensioners will be able to sell their annuity income in return for a lump sum.
- A new Help to Buy ISA for first-time buyers so if you save up to £12,000 towards a deposit, the government will contribute up to £3,000.
- Further increases to the tax-free personal allowance. The personal tax-free allowance will rise again to £10,800 next year, and £11,000 the year after – meaning the typical taxpayer is £900 better off.
- Freezing fuel duty, and cutting beer duty. Labour’s planned fuel duty increase has again been cancelled, delivering the longest duty freeze in 20 years. This saves a typical family around £10 when they fill up. Beer duty is being cut for the third year in a row, with another penny off the pint.
On a final note, the coverage in this morning’s Sun provides the best summary of the Budget in the context of the General Election: