A: The chancellor, George Osborne, has a tough job ahead of him today. How can he boost a stagnant economy but still appease the cash-strapped public?
Pensions and social care – From an interview George Osborne gave on Sunday, we already know that the government plans to bring forward its changes to pensions and social care funding. The proposed flat-tier pension, worth about £144 a week, will now start in 2016, a year earlier than previously planned. And the cap on the amount the elderly pay for social care in England, originally planned to be introduced in 2017 at £75,000, will now also be introduced in 2016 at a level of £72,000.
Personal tax – From the 1st April 2013, the government already planned to reduce the top rate of tax from 50 to 45 per cent and to increase the personal tax allowance (the amount you can earn without paying tax) from £8,105 to £9,400. It’s hoped today that the chancellor will increase this to £10,000, giving people more money in their pocket.
Corporation tax – It is also predicted that George Osborne will crack down further on huge multi-national companies who have been using tax avoidance schemes and legal loopholes to avoid paying the government millions in tax. Indeed, Mr Osborne confirmed on Sunday that he would definitely close a loophole that allows firms to avoid paying £100m a year in National Insurance.
Fuel and Alcohol – At the moment, there is a planned 3p fuel duty rise for this September, but it is hoped that the chancellor will delay this further to ease the rising costs of fuel. However, this could mean bad news for drinkers, with wide predictions that the government will make up the shortfall by raising alcohol taxes above the automatic 2 per cent above inflation increase.
We will bring you the full round-up of what the budget will mean to you later today.
Andrea Ventress, money expert
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