Page last updated at 12:53 GMT, Thursday, 23 April 2009 13:53 UK

The Budget's winners and losers

By Kevin Peachey
Personal finance reporter, BBC News

UK currency
There were winners and losers as a result of the chancellor's decisions

So did you win or lose as a result of Chancellor Alistair Darling's Budget?

Mr Darling says he remains confident about the fundamentals of the economy and made some upbeat predictions about recovery from a recession.

But, as always, the Budget documents contain plans that will directly influence people's personal finances.

In general, high earners were the big losers from this year's Budget, with the elderly getting some extra help having suffered as a result of the economic conditions.

Many people might find they have benefitted from some policies, while losing out on others. Our Budget calculator will allow you to work out how you were specifically affected, but here are some general winners and losers:


Pensioners have suffered in recent months from rising food and fuel prices and have seen returns on their life savings plummet. This Budget aimed to counter this, and so they have been among the biggest winners.

Fireworks at Westminster
The news from Westminster was cause for celebration for some

From November the limit on savings pensioners can have before their Pension Credits are reduced is to be raised from £6,000 to £10,000. This still assumes a high level of returns on savings.

The Winter Fuel Allowance has not been cut as feared and the chancellor repeated a vow that the basic state pension will rise by at least 2.5% next year, regardless of inflation.

Grandparents of working age who care for their grandchildren will see that work count towards their entitlement for the basic state pension.

Savers will be able to put more in their tax-free Individual Savings Accounts. The annual limit will be raised to £10,200 - half of which can be a cash investment - for people aged 50 and over from October and everyone else from April. The current annual limit is £7,200.

Owners of old bangers who want to buy a new car can trade in their vehicle which is more than 10 years old for a £2,000 discount on the shiny new one.


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Jobseekers aged under 25 will be offered a job placement or training if they have been unemployed for more than a year, from January 2010.

Homebuyers will be given some help in the short-term as the stamp duty holiday for homes under £175,000 will be extended from September to the end of 2009.

However, will these people's homes increase in value? The Treasury has forecast that house prices will recover through 2010, a forecast that some housing analysts would consider as ambitious.

Some businesses welcomed measures aimed at helping them through the recession but others said the government could have done more. The BBC's Business Editor Robert Peston says the total cost to the government of deferring business rate payments, the car scrappage scheme, a fund for investing in young start-up companies, and various other smaller initiatives is over £3.3bn.

Children with disabilities will have an extra £100 a year added by the government to their Child Trust Fund - a long-term savings and investment account for children. The severely disabled will get £200.

Carers will be able to benefit from the Savings Gateway - a scheme aimed at encouraging the poorest to save - from about 2010 if they receive Carers' Allowance. This is a proposed scheme in which the government adds a 50p top-up to every one pound saved and untouched for two years.

Rural computer users will see the benefit of a plan which would guarantee broadband internet access for everyone in the UK by 2012.


High earners have been hit hardest by this Budget - a fact featuring on all the front pages of the UK's newspapers.

Empty pocket
The government wants to get some money back from high earners

An extra, higher, rate of income tax of 50% will apply to incomes above £150,000 from April 2010.

Tax relief on pension contributions will be restricted from April 2011, for those people with incomes of £150,000 and over, and will reduce steadily until it is 20% for people with a taxable income of £180,000.

Not quite so high earners will be hit by the chancellor's decision to shunt forward changes in personal allowances. The income tax personal allowance will be restricted for people whose incomes are over £100,000, from April 2010. For every two pounds they earn above that level, they will lose one pound in personal allowance.

Currently this would mean someone having no personal allowance at all, once their income reaches about £113,000.

Drinkers and smokers would have expected the rise in duties which came into effect a few hours after the Budget speech. This time it put 7p on a pack of 20 cigarettes, and 1p on the average pint of beer.

Tax dodgers are unlikely to provoke much sympathy in times of economic concern. A new campaign to recoup tens of millions of pounds in unpaid tax from people with offshore bank accounts has been launched by the government.

Holiday home owners , especially those who based their retirement plans on a second home, will be angry because all of the tax reliefs on holiday properties are to be withdrawn from April 2010.

Motorists will see fuel duty rise by 2p per litre from September, then by 1p a litre above inflation each April for the next four years. Hauliers are not happy with the rise during a recession.

All of us because at the very heart of the Budget was news of the depth of the recession and the fact that the UK will have to borrow a record £175bn. This, the chancellor accepts, will mean a squeeze on spending by the government for years to come.

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