The Budget Breakdown – What Does It Mean For Families?
Yesterday The Chancellor George Osborne unveiled the new Budget and announced key changes which will affect many families in the UK, in plain and simple terms - here’s what you need to know:
What: The decision to scrap child benefits for higher earners was largely unpopular when first announced and has now been watered down slightly to avoid families who earn a few pounds over the limit from seeing their benefits wiped out.
Who: Currently worth £20.30 a week for your first child and then £13.40 for subsequent children, Child Benefit will be scrapped completely for households earning more than £60,000. This could see many high-earning families with three children losing around £2,500.
Families where either partner earns over £50,000 will lose child benefit on a gradual basis – 1% for every extra £100 earned until the household income hits £60,000.
Personal Income Tax
What: From April 2013, personal income tax allowance (the amount you earn before you have to pay tax) will increase from £8,105 to £9,205, giving many working families extra cash each year.
Who: It is estimated that 24 million people will be better off by around £220 a year in 2013. Top tax payers will also see a benefit, with the top 50p tax rate being cut to 45p.
Extras – Alcohol, Cigarettes and Fuel
- No plans to increase duty for fuel, although under previously set guidelines we’ll see petrol prices go up by 3p a litre in August, meaning many of us will be opting to walk the school run if possible.
- Bad news for smokers, as of yesterday a rise on all tobacco products will see a packet of cigarettes cost an extra 37p per pack.
- You could be paying an extra 10p per pint under the previous government guidelines for beer duty. However, with no extra increase planned this won’t go up any further for the time being.
- Tax breaks for premium TV shows and video games could potentially attract companies such as Disney and HBO to make more programmes in the UK – helping the economy and creating more jobs.
- Plans to increase UK exports by a trillion in the next decade so we can wave that ‘Made In Britain’ flag proudly!
- Ten cities across the UK will get £100m of government money to help turn Britain into ‘Europe’s technology centre’, in real terms this will mean ultra-fast broadband and wi-fi for some.
- Network Rail is set to upgrade lines in the North of England, good news if you’re a commuter.
So what does this mean for us?
Although it’s going to be different for every family, overall the free tax allowance increase is going to have the most impact on the majority of us. Added against the loss we’ll make on petrol it could mean many of us will be better off. Unfortunately the child benefit will cause a substantial dent in many families’ finances who are earning over the £50,000 limit.
What do you think of the Budget? How will it affect your family?