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Last Updated: Monday, 5 December 2005, 19:23 GMT
What the pre-Budget report means for you
Hands and coins
While economists debate the chancellor's growth forecasts, many people will be more interested in what the pre-Budget report means in practice - from tax credits to affordable housing.

Here are some of the key points.

I have children. Is there any help for me?

Yes, if you are eligible to claim tax credits.

Gordon Brown announced that tax credits would be made more generous in 2006.

Nearly all tax credit payments are set to increase by about 3%.

Tax credits are still the chancellor's favoured means of helping UK families. This is despite widespread overpayment problems.

Last year nearly two million people were overpaid. Many were left in the lurch when the Revenue & Customs subsequently demanded that their overpayment be repaid.

To ease this problem the chancellor said the amount of money that family income could rise before the Revenue tried to claw back any overpayment was to increase 10-fold from 2,500 to 25,000.

My daughter and son-in-law are desperate to get a foot on the property ladder - is anything going to be done for them?

Yes. The chancellor used the pre-Budget report to respond to a review on housing supply by Professor Kate Barker in 2004.

The Barker review called for an extra 70,000-120,000 new homes to be built each year.

Gordon Brown, in his speech, stressed the need for more affordable housing for families.

He said there would be:

  • A big expansion in shared equity schemes, where lenders and the government take a stake in the homes of first-time buyers
  • Reform of the planning system aimed at speeding up the building of new homes
  • Legislation to allow the setting up of Real Estate Investment Trusts (Reits), with the aim of boosting investment in house building
  • Consultation on the introduction of a Planning Gain Supplement (PGS) which would give the government a slice of any rise in the value of the land which has been granted planning permission

The imposition of a PGS is unlikely to be popular with house builders, or individuals owning land.

Some property firms have suggested it could lead to less land being made available for house building and ultimately fewer houses being built.

But the chancellor argued that the money raised through the PGS would be used to improve the infrastructure in areas where new building was taking place.

I am a pensioner. Will I get any more money?

Yes, but it will be targeted to help you meet higher heating costs.

Pensioner households will receive winter fuel payments of 200, each year throughout the rest of this parliament.

The over 80s will enjoy an additional 100 in winter fuel payments.

Pensioner households will also be able to claim help with some or all of the cost of installing central heating and insulation.

In future, the poorest pensioners who are eligible for pension credit will be able to claim free central heating and insulation.

I am an employee. Will I be paying more tax?

The chancellor announced a 3% increase in personal allowances, which is the amount of money you can earn before income tax becomes payable.

Income Tax Personal Allowances
People under the age of 65 up from 4,895 to 5,035
People age 65-74 up from 7,090 to 7,280
People age 75 and over up from 7,220 to 7,420
Married couples' allowance rises from 5,905 to 6,065
Married couples' allowance age 75 or over rises from 5,975 to 6,135
Source: HM Treasury

The threshold at which National Insurance Contributions become payable will rise by a similiar percentage.

However, the increase in personal allowances is just below the average rise in wages.

As a result, taxpayers will continue to suffer what economists call fiscal drag.

This means that as wages escalate away from tax allowances a greater proportion of your income ends up being taxed or falling into a higher tax bracket.

You end up paying more tax, but only provided your income rises.

I am a saver. What is all this I hear about money from accounts going to charity?

The chancellor would like money held in dormant savings accounts to be spent on youth projects and improvements to youth and community facilities throughout the country.

Banks and building societies have been accused of using the money held in dormant accounts to make their finance looks more healthy

But if you have money tucked away in savings there is no need to panic, you are not about to lose it.

An account passes from live to dormant when the bank or building society loses touch with the account holder for a period of at least three years.

Often the bank or building society will write to the account holder to tell them that their account is about to become dormant.

In reality, many dormant accounts are in the names of people long deceased.

The chancellor said accounts would have to have been dormant for fifteen years before the money in them could be used for youth and community projects.

It has been estimated that 1bn could be gathered from dormant accounts.

Is there anything else?

The chancellor announced changes to planned reforms of Self Invested Personal Pensions (Sipps).

From next April, people will be able to use money invested in Sipps to buy residential property.

But now - on the purchase - Sipps will face a one-off tax charge equivalent to 40% of the property's market value.

This, in effect, negates any tax relief the saver would have received on making contributions to Sipps.

Higher rate taxpayers receive 40% tax relief on any cash they pay into Sipps.

The Treasury took the step after widespread criticism that planned reform of Sipps was nothing more than a tax break for the rich.

The new one-off tax charge will also apply when Sipps buy "tangible moveable assets" such as fine wines, classic cars and works of art.

Watch the Chancellor's pre-Budget report

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