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Six takeaways from the 2014 Budget

Are you about the 2014 Budget? Here are six things you need to know when it comes to the Budget and your finances.

Coins and a calculator

With just over a year until the next general election, it was no surprise that Chancellor George Osborne’s Budget contained a fair amount of good news.

An improving economy means the government has a bit more cash to play with: so who stands to benefit?

1. Fuel duty remains on hold

Motorists will not be disappointed that the Chancellor has decided to scrap the rise in fuel duty originally planned for September.

But the 3p cut in tax demanded by campaigners such as Fair Fuel UK has not come to fruition.

Nonetheless, as Osborne pointed out in his speech, the price of a litre of fuel is 20p lower than it would have been had the coalition not implemented a string of freezes since coming to power in 2010.

Use our fuel price calculator to work out how much it will cost to fill up based on the make and model of your motor and your mileage.

2. £200m for pothole repairs

A pothole and a carIn today's Budget announcement, the Chancellor said: "Our roads too have taken a battering.

"My Honourable Friend for Northampton North has been a persistent campaigner for resources to repair the potholes in his constituency and across the country.

"His persistence has paid off. I'm making £200 million available which local authorities can bid for. I trust Northampton will be making an application."

3. Dramatic reform of ISAs

After years of ignoring the plight of savers suffering from high inflation and rock-bottom interest rates, George Osborne has really made up for lost time.

PiggybankHe has made significant changes to how tax-free ISAs operate, firstly by increasing the total saving limit from just over £11,000 to £15,000 a year – a huge leap.

Account holders will in future be allowed to devote their entire allowance to cash – until now, no more than half could be in cash and the rest in stockmarket investments.

And individuals will be allowed to move holdings from stocks-and-shares ISAs into cash ISAs without losing any of the tax advantages.

At present, transfers are only permitted from cash into shares.

Allowances on Junior ISAs will also be increased, to £4,000 a year from the current £3,720.

The ISA changes are scheduled for 1 July 2014.

4. New 'pensioner bond' for over-65s

As an extra boost for older savers, the Chancellor announced that the government-backed National Savings & Investments bank will introduce a "pensioner bond" at the start of 2015.

This will be a fixed-rate, fixed-term deposit account that pays a better rate of interest than high-street deals, and which will be available to those aged 65 or older.

Although the exact interest rate is yet to be set, Osborne indicated that a one-year deal could pay as much as 2.8%, with a three-year bond paying around 4%: both excellent value.

The most any single saver can put into a bond will be £10,000, and there will be a total of £10 billion available to the public.

5. Overhaul of pension system

Retirement fund jar

The most ambitious changes announced by Osborne today concerned pensions.

Proposed reforms will make it easier to take money out of a pension when you retire.

And there will be less emphasis on buying an annuity – the financial product that turns a pension pot into a guaranteed income for the rest of your life.

Upon retirement, savers can take up to 25% of their pension funds as a tax-free lump sum, but at present any further withdrawals are taxed at a punitive 55%.

The planned changes mean that this higher rate will be scrapped: instead, withdrawals will be taxed at the saver's current rate – in most cases, 20%.

And retirees will be encouraged to leave their pensions invested, and withdraw cash as and when it is required – a process known as drawdown – rather than buying an annuity.

6. Help to Buy scheme extended

Estate agents' signsThe Chancellor George Osborne also announced he was extending the part of the Help To Buy scheme that gives financial support to purchasers of new-build homes.

The programme was expected to end in 2016, but will now run at least until 2020 in England.

Under the scheme, the buyers need a deposit worth just 5% of the home's value, with the government offering an equity loan of 20% and the rest coming from the mortgage lender.

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Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris