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Last Updated: Wednesday, 21 March 2007, 14:18 GMT
Q&A: What the Budget means to you
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Will you be richer or poorer as a result of the budget?

Chancellor Gordon Brown has just delivered what could be his last Budget. What impact will the changes have on the personal finances of millions of Britons?

I am in work, what is in the Budget for me?

The big news is that the basic rate of income tax has been cut by 2p to 20p from April 2008.

At the same time, the 10p income tax rate on the first 2,150 earned (2006/2007 tax year) above your personal allowance is being abolished.

This means in effect that you will have to pay 20% as soon as you earn more than your personal allowance rate.

In addition, the upper earnings limit for National Insurance will rise to bring it in line with the 40% income tax threshold.

As a result, high earners will pay more National Insurance.

Overall - taking all the income tax and National Insurance changes into account - many people will find they are no better-off.

I am a pensioner, what is there for me?

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Many will be cheered by the news that income tax personal allowances will rise dramatically.

For pensioners under the age of 75 the tax free allowance will rise in stages from 7,280 to 9,770 in 2011. This may offset the extra cost due to the abolition of the 10% income tax rate.

But because of complex rules where the amount you earn will affect your tax free allowance, pensioners earning more than 26,000 may find that they receive no benefit from the higher allowances announced by Gordon Brown.

The Pension credit guarantee will rise to 130 by 2010.

People who have lost their retirement savings when their company pension scheme went bust received a welcome boost.

The chancellor pledged that the amount of money being made available to the Financial Assistance Scheme - which pays money to people who have lost their pensions - would quadruple from 2bn to 8bn.

Recently, the government has faced a high-profile campaign to force it to compensate people who have lost their pensions.

We drive a gas-guzzling people carrier, will the Budget mean extra expense?

Yes it will.

The Chancellor has upped Vehicle Excise Duty (VED) on the highest polluting vehicles, including many people carriers and 4x4s.

The annual cost of VED for the most polluting vehicles will rise from 210 to 300 this year and then 400 in 2008.

Further pain could be on the way. In the past two Budgets the chancellor has raised VED on the most-polluting cars by far more than inflation.

Now may be the time to switch to a less polluting car.

As part of the government's carrot and stick approach, vehicles with smaller engines in the lowest polluting categories will pay lower VED.

Vehicles in band B will see VED cut by 30%.

A 2p increase in petrol duty has been deferred until October.

I am concerned about the environment, is anything new being done?

The environment is one of the hot political topics of the moment.

All three main political parties are keen to highlight their green credentials.

Recently, the Conservatives proposed that people who take more than their fair share of flights to pay more tax - in effect, proposing a "polluter pays" approach.
Land Rover
Driving a "gas guzzler" will become more expensive

The chancellor has taken a different approach, trying to offer sweeteners for people to adopt a more green lifestyle.

For example, extra grants will be available to pensioners installing insulation.

I am a saver, is there any reason for me to celebrate?

Yes the amount of money you can pay into a cash Individual Savings Account (ISA) will rise from 3,000 to 3,600.

More than 16 million Britons have an ISA.

I am on a low income, what extra is on offer?

Tax credits are the main method that the chancellor wants to "make work pay".

Working tax credit, claimed by 1.5 million Britons, will receive a 1bn boost.

The chancellor said the average working tax credit claimant would be 7.10 per week better off as a result.

Lone parents will get a weekly bonus for their first year in work.

I have children. What extra help is available to me?

Child benefit will rise 15% by 2010.

In the pre-Budget report, the chancellor announced additional child benefit that would be paid to mothers with new babies.

In April, benefit payments for the poorest children will rise to 64 a week.

Investment in education has been marked out as a priority for a possible future Brown premiership.

Gordon Brown
Gordon Brown wants education to be a priority

In addition, greater investment is being made in apprenticeship schemes. This could boost your children's prospects of finding employment when they leave school.

Is there anything else?

The Inheritance Tax ( IHT) threshold will rise to 350,000 by 2010.

Previous Budgets had set in train an increase in the IHT threshold to 325,000 by 2009.

The duty on beer and wine is set to rise in line with inflation but duty on spirits is frozen again.




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