Budget 2012: it's time to tighten your belts!

It was Budget Day in Britain yesterday and I’ve been waiting eagerly to find out how George Osborn’s third budget will affect families like mine.

Full of pomp and looking very pleased for himself, Mr Osborn presented his budget, making it sound all very positive.

Looking around for comments from others I spoke with John Evans, CEO, Incahoot.com who commented; “We strongly commend the Chancellor for listening to the masses and increasing the personal income tax allowance to £9,205 – an extra £220 per year. This extra disposable income will make a huge difference to the ‘Squeezed Middle’, who have otherwise been largely ignored in today’s announcement.

"However, I was shocked and disappointed that Mr Osborne did not cut VAT on household energy bills, as advised by a number of bodies. This move would instantly take a large number of UK households out of fuel poverty and save everyone money on their annual bill.”

Ah, now that’s not so good then is it? An increase in income tax allowance is only good news if the rest of the budget continues to deliver savings. If it’s a case of giving with one hand only to take (and then some) with the other then we’re all missing out.

So what other treats or surprises did the Budget bring?

• A gradual withdrawal of child benefit to families where one person earns over £50K of 1% per £100 over the threshold. However, those over the £60K threshold will lose the benefit altogether.

• Ultra-fast broadband will be supported in 10 big cities across the UK, with an additional £50m available for smaller cities too. Good news providing the infrastructure is in place to support the plans, although with no plans to support rural areas, it could lead to a real divide in accessibility with a potential knock-on effect to schools and educational institutions reliant on broadband.

• Fuel prices will not go up straight away but a 3.02p per litre rise will go ahead on August 1st as planned

• Pensioners continue to lose out amidst plans cited to ‘simplify’ the pension system. The National Association of Pension Funds said: "Over the course of this Parliament, pensioners stand to lose over £2bn in age-related tax allowance.”

It’s never good news is it? But do we really expect it to be? The best advice is to continue to spend frugally, save where you can, switch utilities if it means saving money (and it almost certainly will), and tighten your belts.

How is the budget going to affect you?
 

Thursday, 22nd March 2012

Back to top ↑