George Osborne has delivered his eagerly awaited Autumn Statement. Amid the dire predictions of a slowing economy and his failure to balance the country's books there were a number of key announcements that affect everyone.
Below I cover the important points that affect your personal finances:
- Public sector pay awards to be frozen at an average of 1% at the end of the current 2 year pay freeze
- The number of public sector jobs set to be lost by 2017 was revised up from 400,000 to 710,000.
- January's planned 3p increase in fuel duty was cancelled and August's increase will be limited to 2p
- The capital gains tax free allowance will remain at £10,600 for 2012-13
- Income tax thresholds for 2012/13: Personal allowance - £8,105 for under 65. For those ages 65-74 the personal income tax allowance is £10,500. For those aged 75+ the allowance is £10,660 with the limit for age allowance being £25,400
- Most working age and disability benefits will be upgraded by the September inflation figure of 5.2%
- The state pension age is set to rise from 66 to 67 from 2026
- The state pension will rise by £5.30 to £107.45 a week. Pensioners receiving pension credit will also benefit from an increase worth £5.35
- The Right to Buy scheme for council tenants will offer a maximum discount of 50% with cash raised used to build social housing
- £400m earmarked to jump start stalled construction projects
- The Government will underwrite mortgages for 100,000 for first-time buyers
- First time buyers will no longer get an exemption from stamp duty from March 2012
- There were changes to Venture Capital Trusts (VCTs), which are tax incentivised high risk investments into small companies, which will more investment freedom
- A new version of the Enterprise Investment Scheme (EIS) (again these are high risk investments) was announced which could give up to 50% income tax relief to investors.
- The Government to underwrite up to £40bn in low-interest loans to small businesses
- £1bn to be made available for investing in mid-sized businesses through non-bank channels
- The current bank levy (a tax on bank borrowing in the UK) will increase to 0.088%
- The Regional Growth Fund will be increased by £1bn
- Plans to publish a National Infrastructure Plan, identifying over 500 projects for the next decade
- Rail fare increases would be limited to the retail price index plus 1% rather than RPI plus 3%
- £380m will be invested to offer free education and care to disadvantaged two-year olds
- £1.2 bn for capital investment in schools
- £1bn youth contract to fund measures to make it easier for private sector employers to employ young people
What wasn't in the Autumn Statement that people were speculating might be?
There was no announced changes to:
- High rate tax relief on pension contributions
- Pension Tax free cash lump sums
- The 50p tax rate
- National Insurance
- Child Trust funds and Junior ISAs