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Chancellor unveils ‘Budget for growth’

Chancellor unveils ‘Budget for growth’

Category: Money

Updated: 23/03/2011
First Published: 23/03/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Petrol, pensions and personal allowances were all on the mind of George Osborne as the Government unveiled what it called a 'Budget for growth'.

Proposed tax hikes on petrol have been scrapped and replaced by an immediate 1p reduction in the price of a litre of petrol and a new 'fair fuel stabiliser' to keep petrol affordable when oil prices are high.

On the topic of retirement, the Chancellor announced the 'unbelievably complex' state pension system will be reformed.

A single tier pension is set to be introduced paying out a flat rate of £140 per week to future pensioners.

Current pensioners will not be affected as the new system will take years to put in place.

Meanwhile, further rises in the state pension age have been signalled after plans were revealed to introduce an automatic mechanism to implement future rises in the state pension age.

The age at which men and women can take their state pension is already being increased to 66 by 2020, and will soon seemingly rise according to changes in life expectancy.

Simplification of the tax system was also on the agenda, with a consultation announced regarding the integration of income tax and national insurance contributions.

An increase in the personal allowance of £630 in April 2012 to £8,105 was also revealed, a move which the Government claims will take 260,000 more people out of income tax and reduce the tax paid by 25 million people by an average of £48.

Amongst the other measures unveiled by the Chancellor was a further increase in the bank levy from January 2012, a move designed to offset the benefit to banks of the decision to cut corporation tax.

Profits raised by the bank levy will be used to fund a new shared equity scheme designed to help first time buyers onto the property ladder.

The £250 million scheme will offer 10,000 families an equity investment of 20% towards the deposit on new-build homes.

In the small print of the Budget, the Government announced it will shortly publish draft regulations regarding the creation of a new savings vehicle for children.

The introduction of a Junior ISA will fill the void left by the phasing out of the Child Trust Fund.

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