How the Budget will impact on household finances

POSTED: 21st March 2013
IN: Personal News

George Osborne delivered his 2013 Budget yesterday (March 20th) at the House of Commons, outlining a number of measures to help restore growth to the economy.

undefinedMany households will have been hoping for relief on their personal finances, and in many ways they received it, but the picture is not altogether clear-cut.

What will be welcomed by lower earners is the increase in personal allowance, which is set to rise from £9,440 on April 6th 2013 to £10,000 in April 2014.

However, calculations from the national charity Citizens Advice suggest this will see the lowest paid take home an extra 32p per week, while a couple both earning £30,000 per year will pocket an extra £4.30 per week, or £224 each year.

Higher earners will see the 40 percent tax rate imposed sooner on their earnings, with the limit set to be reduced from £32,010 to £31,856 from 2014, which could serve as blow to middle-income households.

However, there was a boost for working families as the government confirmed support for childcare costs of up to £6,000 per year per child.

Some 20 per cent will be available worth up to £1,200, provided both parents are in employment, or in the case of single-parent families, that the lone parent is in work.

While those changes are set to directly affect British households, other tax cuts will prove advantageous to certain people.

For instance, the reduction in beer duty will see the cost of a pint fall by 1p, while a freeze on fuel duty will help to keep motorists' costs to a minimum.

The chancellor also moved to slash Corporation Tax to 20 per cent - a decision that is expected to see workers benefit from higher wages.

Chief executive of The Tax Payers' Alliance Matthew Sinclair said: "George Osborne has announced welcome relief for people struggling with the high cost of living.

"Unfortunately, the great limitation of this Budget was that it relied far too much on complicated targeted reliefs instead of tax cuts across the board."

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