By Sharon Flaherty
At 12.32 today (9 December) the chancellor, Alistair Darling stood up to deliver his annual pre-Budget speech, while the rest of us waited to hear how our household budgets would be affected.
Well the good news is, he didn’t pull any horrible surprises out of the bag, but there are a few changes that you need to know about. Here is a run-down on how they potentially affect you.
Your income: pay, pensions and benefits
National Insurance contributions:
All employer, employee and self-employed National Insurance contributions will increase by a further 0.5 per cent from April 2011, adding to the 0.5 per cent hike already penned in to take affect from April 2011 (announced in the 2008 pre-Budget report). However, to protect those on modest incomes, the chancellor said he would raise the starting point from which National Insurance contributions are payable, so that no-one earning under £20,000 will pay the higher contributions.
The basic state pension: Good news if you already draw a state pension, as it will rise by 2.5 per cent from April 2010.
Child and disability benefits: Effective from 2010, the chancellor will increase child and disability benefit by 1.5 per cent.
Stamp Duty: Calls for the chancellor to extend the stamp duty holiday – which allowed residential homes under £175,000 to be bought tax-free – have been ignored. From 1 January 2010, properties priced over £125,000 will again have to pay a 1 per cent tax on the property.
VAT: VAT which was reduced to 15 per cent during the credit crisis, will return to its normal level of 17.5 per cent from 1 January 2010. The chancellor said there are no further planed changes to the level of VAT.
Your vehicle and your home: Improving energy efficiency
Household boiler scrappage scheme: The chancellor has called for each and every one of us to become more energy efficient and cut household bills. He said each inefficient boiler adds over £200 to household bills and one tonne of carbon to the atmosphere. As a result, 125,000 homes will now be eligible for funding to replace inefficient boilers with new models, from April.
Home wind turbines and solar panels: From April 2010, people with a home wind turbine or solar panels who then plug their excess power into the national grid will receive on average £900 a year tax free from the government.
Electric motoring: In a bid to increase the number of electric cars on UK streets, the chancellor from April 2010, will allow electric car drivers to enjoy tax free benefits exempting the vehicles from company car tax for five years.
!!-- Confused Replacement Google AdSense --!!
The economy: What to expect in the year ahead
Economic growth: The UK economy (GDP) is expected to grow in 2010, by between 1-1.5 per cent. This year the economy is expected to shrink in total by 4.75 per cent.
Inflation: Concerns about inflation look set to continue with the chancellor anticipating inflation will rise to 3 per cent in the early part of 2010, with it then falling back to 1.5 per cent at the end of 2010.
And finally.....Banker bonuses
For all of the bank’s paying bonuses to their bankers in excess of £25,000, a 50 per cent super-tax will be levied on the bank itself in a bid to encourage banks to rebuild financial strength. The measure comes into effect immediately.
To read our blog on the pre-Budget and add your comments, follow this link.
!!-- Confused Replacement Quote Me Savings --!!
