Page last updated at 16:13 GMT, Wednesday, 22 April 2009 17:13 UK

Q&A: How the Budget affects you

Piggy bank

The Chancellor, Alistair Darling, has delivered his Budget for 2009.

The measures are part of the government's efforts to drag the economy out of the deepest recession since World War II. But how will the Budget affect you?

Any help for home buyers?

Yes. The current stamp duty holiday is being extended to the end of 2009. That means anyone who buys a home for less than £175,000 will, until then, continue to pay no stamp duty on their transaction.

I am worried about my home being repossessed

The scheme that lets you claim state benefits to help you pay interest on your mortgage - Income Support for Mortgage Interest (ISMI) - is being extended so the support lasts for an extra six months.

Will I be helped to buy a new car?

BUDGET 2009

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The government is copying the Germans and the French and bringing in a scrappage scheme. From May 2009 to March 2010 you will be able to get a guaranteed £2,000 trade-in value for your old car, if it is at least 10 years old and you buy a new car.

However, to benefit from the scheme, you must have been the registered owner of the car that is due to be scrapped for at least 12 months.

What is happening to tax relief on my pension contributions?

If you are in the 1% of the population who earn more than £150,000 annually, then from April 2011 the 40% tax relief you enjoy on your pension contributions will be whittled away as your income goes up , until your tax relief is just 20%.

The details will be the subject of consultation but your 40% tax relief will disappear completely once your income reaches £180,000.

Any changes to income tax?

Again, if you earn more than £150,000 a year, the previously proposed increase in your top rate of tax to 45% will now be raised to 50% - and a year earlier than planned too - in 2010.

Those earning more than £100,000 will see their personal income tax allowances gradually withdrawn, as your income goes up, from April 2010.

On present levels, this means someone will have no personal allowance once their income has hit about £113,000.

At the other end of the scale, from April next year, the child element of Child Tax Credit will go up by £20.

Children with disabilities will get £100 more a year in their Child Trust Fund, with an extra £200 each year for those with severe disabilities.

Am I being encouraged to save more money?

Yes. The amount of money you can save each year in Individual Savings Accounts (Isas) will be raised. The upper annual limit will go up from £7,200 to £10,200, of which £5,100 can be in cash.

These new limits will apply from this year for those aged 50 and over, and for everyone else from next year.

What about the elderly?

Grandparents of working age who spend time looking after their grandchildren will find their time spent with them counts towards the calculation of their state pension.

The pensioners' winter fuel allowance will stay at the higher level of £250 for the over-60s and £400 for the over-80s for another year.

I am worried about losing my job

The government will put an extra £1.7bn into running the network of Job Centre Plus offices and its New Deal programme for the out-of-work.

Everyone under the age of 25 who has been out of work for more than a year will be offered a place in a training scheme.


On BBC 5 Live tonight from 2300 Rachel Burden will be holding a Budget clinic, with experts on hand to answer your questions about what the Budget means for you. You can get in touch with the programme by emailing burden@bbc.co.uk

BBC 5 Live on 909/693 MW, DAB digital radio and online at bbc.co.uk/5live



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