Get the lowdown on Budget cuts

This week’s ’emergency’ Budget has been big news, and there’s an awful lot to take in – so here’s a round-up of some of the key points, as well as links to some more in-depth information.

  • VAT is to go up to 20% from 4th January 2011 –  look out for a comment from our own Jake Ridge in this article
  • Personal income tax allowance is to be increased to £7,475 from April 2011 – this will save basic rate tax payers £170 a year and will mean that 880,000 will no longer pay income tax
  • Capital Gains Tax has gone up to 28% for higher rate tax payers
  • The proposed ‘broaband tax’ has been cancelledthis would have added £6 a year onto landline rental
  • No increase in duty on fuel, achohol or cigarettes
  • Child benefit is to be frozen for 3 years – the health in pregnancy grant will also be abolished from April 2011, and the Sure Start scheme restricted.
  • Tax credits will be cut for families with an income of over £40,000
  • There will be new limits on how much housing benefit people can claim
  • People will have to have a medical assesment to claim Disability Living Allowance from April 2010
  • Insurance premium tax to increase from 5% to 6% from January 2011
  • 2-year pay freeze  for public sector workers earning over £21,000
  • The basic state pension will be linked to earnings from April 2011, and will also be guaranteed to rise alonside either earnings, prices or 2.5% (depending on which is highest)

Find out more about what George Osborne’s Budget will mean for your finances.