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Working Lunch Wednesday, 9 April, 2003, 16:34 GMT 17:34 UK
Budget gems
Working Lunch picks out the key highlights of this year's budget
The budget was keenly watched by three of our Working Lunch experts. Taxman John Whiting, senior tax partner with PricewaterhouseCoopers. Christine Ross, Head of financial planning at SG Hambros and our own resident expert Simon Gompertz, looking at pensions and benefits.

Here's what they had to say.

For savers

For savers, the highlight was the introduction of the Child Trust Fund.

The Child Trust Fund will start off a savings plan for every child, with a contribution of at least 250, rising to a maximum of 500 for children from less well off families.

Parents and grandparents will be able to add to the fund, up to a maximum of 1000 per year.

There is no detail as to the taxation of the fund, but there will be incentives to make contributions. These may be tax breaks or perhaps a contribution 'matching' scheme - where the government matches contributions from relatives on a like for like basis. But this could be means tested.

Christine says the trust fund sounds good, but the devil will be in the detail.

The Government may add more at certain key life stages, but more details are yet to come.

Children will not be able to touch the fund until they're 18, when they can spend it or roll over the savings plan into another savings scheme.

Of course the intention is that a savings fund will give every young adult a start in their financial life, and may help to pay for university education, a car or a deposit for a first home.

Fuller details of the plan will be delivered in the summer.

For borrowers

The Government wants to enourage lenders to offer long term fixed rate mortgages. The idea behind this is to provide greater certainty for borrowers, especially those entering the property market for the first time.

This type of loan is very common in the USA but has been offered by only a few lenders over here. Many home buyers are entering the market at a time when interest rates are at an all time low and could be overstretched if they rise significantly.

This will now be under review but can only be a positive move if the borrowers are encouraged to offer these products.

Tax

For individuals who are still coping with the rises in National Insurance Contributions, there were no real changes to their tax burdens.

Income tax bands went up modlestly. And, at a time when more and more people are being dragged into the IHT net, many will be disappointed that the inheritance tax threshold only went up by 5,000.

Small businesses did get some sweeteners with modestly higher capital allowances and business in general will welcome the widening of the research and development tax relief.

Property companies will be suspicious says John

But property companies in particular will be suspicious of the threats to increase their stamp duty burden and just as with individuals, there was nothing to compensate for the recent NIC hike.

As always with Gordon Brown, there was a lot of detail to wade through - 62 press notices from the tax authorities! Buried in the detail are many tweaks and twiddles, some of which will raise a few bob on anti-avoidance measures. But let's raise a glass to the doubling of the Christmas party concession - you can now have a 150 Christmas party per employee before a the taxman sobers you up.

Pensions and benefits

"Still waiting" will be the verdict of many pensioners on this Budget.

The big change in store is the introduction of the new Pension Credit, which replaces the Minimum Income Guarantee of 102 a week and adds the potential for a top-up from the state for people who have saved for their retirement.

Gordon Brown took the opportunity to trumpet the arrival of the Pension Credit. But the details had already been announced before Christmas. And the launch was already pencilled in for October this year.

However, there were two measures announced in the Budget which will make a big difference to many senior citizens.

There will no longer be a deduction from the state pension for any time over six weeks spent in hospital. Plenty of Working Lunch viewers have complained about being charged, effectively, for meals and accommodation during treatment while other patients paid nothing.

No more deductions from pension for long hospital stays
100 extra winter fuel payment for over 80's
Lone parents will have their benefit protected if they work part-time
19 increase in Incapacity benefit for disabled in low paid work

And there's an extra 100 added to the 200 Winter Fuel Payment for those who have reached the age of 80.

As expected, the Chancellor took the opportunity to celebrate the launch of the Child Tax Credit and the Working Tax Credit this month. Many households are already taking advantage and all the details were announced last year.

He has announced a few additional tweaks to the benefits system this time round. There are some changes to Housing Benefit to allow people who start work to continue claiming at the same rate.

Lone parents will have their benefit protected if they want to work part time.

Disabled men and women on incapacity benefit will qualify for an extra 19 a week from the Working Tax Credit if they move into a low-paid job, a measure designed to make work more financially rewarding.

Overall, this tasted like a meal which Gordon Brown had prepared earlier, full of measures from last year, put in the freezer for a few months, then served up for public consumption once again.

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