In the News - Budget Summary 2009

How will the 2009 Budget affect you?

A summary of the key points for the consumer in the 2009 Budget, which was announced today.

Headlines on the Economy:

1. Chancellor forecasts GDP to decrease by 3.5% this year (over twice as much as he had forecast in the Pre-Budget report in Nov 08), but he expects growth to resume by the end of 2009.

2. National debt will continue to rise until 2013/2014 when it will be 79% of GDP (twice as much as when Labour came to power and an historic high), but after then the Chancellor expects it start to decrease.

3. Public spending growth will be cut - 1.1% growth this year and 0.7% growth next year. According to the Conservatives this amounts to £10 billion of real cuts over the next 2 years.

Headlines on Taxes:

1. The temporary reducation in VAT from 17.5 to 15% will stay in place until December.

2. The stamp-duty holiday for properties worth under £175,000 will stay until end of the year.

3. Tax on petrol will go up 2p in Septemer and then 1p for the next 4 years.

4. Tax on alocoholic drinks will go up 2% from midnight tonight.

5. Tax on cigarettes will go up 2% from 6pm today.

6. For those earning more than £150,000 a year, the proposed 45% rate of tax has been increased to 50% and will be brought-in a year earlier in 2010/2011.

7. Pension tax relief for those earning over £150,000 will be scrapped.

8. There will be no personal tax allowance for those earning over £150,000 from April 2010.

Other Headlines:

1. Chancellor announced a new scheme to give £2,000 to anyone who scraps a car over 10 years old to buy a new one. The scheme is due to run until March 2010.

2. From next year the limit that you can save tax-free in a cash ISA will go up from £3,600 to £5,100. For the over 50s, the increased limit will be available this year.

3. From April 2010, child tax credit will go up £20.

4. Statutory redudancy pay will increase from £350 to £380 per week.

5. State pension to rise by 2.5% regardless of inflation.

6. Winter fuel allowance for the over 60s will stay at the temporary higher level for another year.

7. Pension savings credit limit will increase from £6,200 to £10,000. I.e. you can have up to £10,000 in savings and still qualify for the pensions credit benefit.

8. Chancellor pledges to decrease carbon emissions by 34% by 2020 and announces investment in green industy, technological research, energy efficiency and renewable energy.

There was more, particularly on business, housing and green industries. For more information and analysis, check out the BBC's Budget Website.

Posted by Plebble Admin at 14:18 on 22-Apr-2009