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The Budget 2011: 3 Minute Guide

At 12.30pm on Wednesday 23rd March, 2011, Chancellor George Osborne announced The Budget 2011. Here's a summary of the key announcements that are likely to have the biggest impact on your household finances.

Check the table below to find out how you'll be affected by The Budget 2011 then share your opinion of the Chancellor's plans with us and other money.co.uk members.

You can do this by posting your comments below or taking part in the money.co.uk community's discussion on The Budget.

Tax
Income tax	From April 2012 personal allowance will increase by £630 to £8105. This increase won't be restricted to basic rate tax payers so no one else will be pulled into the higher rate tax band. The 50% tax rate will be reviewed and potentially removed if it has not generated sufficient revenue.
National insurance	Income tax & National Insurance may be merged to a single tax if it is viable to do so. However, this will not result in pensioners having to pay National Insurance. The 1% National Insurance increase scheduled for April 2011 will go ahead as planned.
Inheritance tax	The Inheritance Tax Rate will be reduced by 10% for anyone who leaves 10% or more of their estate to charity.
Other tax	From April 2012 the thresholds for Income Tax, National Insurance, ISAs and Inheritance Tax will increase by the CPI measure of inflation instead of by RPI. Taxes on owners of high value property will be reformed. Measures to clamp down on tax avoidance will be introduced. Income tax relief on the Enterprise Investment Scheme will increase from 20% to 30% in April, 2011.

Housing
First time buyers	£250 million commitment has been made to help first time buyers. A new shared equity scheme - First Buy - will help 10,000 families to purchase a new build home.
Mortgage Support	The Support for Mortgage Interest scheme will be extended for another year.
Council tax	Every council across the UK has agreed to freeze council tax for the coming year.
Water bills	Public money will be used to help cut water bills for customers in the South West of England.

Alcohol & Tobacco
Alcohol	A reduced rate of tax will apply to low strength beers from 1st October, 2011. A higher rate of tax will be applied to high strength beers from this date. There will be no change to any other alcohol duty rates.
Tobacco	Tobacco duty rates to increase by 2% above inflation. Tax on hand-rolled tobacco will increase by an additional 10%.

Transport
Fuel	Fuel duty will be cut by 1p a litre from 6pm today (23rd March, 2011). The planned 1p increase in fuel duty scheduled for April will be pushed back a year. The subsequent inflation-linked rise scheduled for April 2012 will be pushed back until the following summer. A Fair Fuel Stabiliser will be introduced from tomorrow - fuel duty will go down when fuel prices increase, & go up when fuel prices fall. The fuel duty escalator will be scrapped for the rest of this Parliament. A rural fuel duty scheme will be piloted.
Approved mileage allowance	Approved mileage allowance payments will increase to 45p a mile for the first 10,000 miles & 25p a mile thereafter. It will also be paid for volunteers travelling as passengers.
Road tax	Vehicle Exercise Duty will increase by inflation only.
Trains	£200 million will be invested in regional railways.
Flights	The planned increase in air passenger duty will be delayed until next year.

Employment & Education
Employment	A new start up scheme to support entrepreneurs - Start Up Britain - will be launched. 21 new enterprise zones will be introduced. Entrepreneur's Relief will be doubled to £10 million on 6th April.
Education	24 new university technical colleges will be set up. 100,000 places in new work experience schemes will be introduced. 50,000 apprenticeship places will be created over the next four years.

Pensions
State pension	A new, single tier, flat rate pension based on contributions will be introduced subject to a consultation. This will be worth approximately £140 a week but it will take years to implement. Current pensioners won't be affected by the change. Plans to introduce automatic increases to the State Pension Age have been brought forward subject to review.
Public sector pensions	Public sector workers will have to increase their pension contributions by approx. 3%. The government will consult on scrapping final salary pensions for public sector workers & replacing them with career average pension benefits.

Government•Financial Services

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Responses (4)

This Budget is nothing better than a farse, especially the 1p reduction in fuel. This time last Year the average price here at the pumps in N Ireland was ?1:17 A LTR for Petrol Now it's ?1:34 Per LTR 17p of a Rise.So weve had a penny knocked of a LTR of Fuel & 3p added on to fuel Tax... Am i Missing somthing here? It's CRAZY & the Public ain't STUPID!

by stevie, 2 years ago

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I THOUGHT KING JOHN WAS DEAD OBVIOUSLY RE-INCARNATED IT JUST CONTINUES THE RICH GET RICHER AND THE POOR GET POORER WHEN ARE WE PEASANTS GOING TO REVOLT IT WOULD BE NICE TO KNOW WHERE OUR MONEY GOES IT WOULD BE LOVELY TO NOT BE BOTHERED ABOUT RISING COSTS INSTEAD OF WORRYING ABOUT MAKING MY MONTHLY PAYCHECK STRETCH TO THE END OF THE MONTH IVE WORKED ALL MY LIFE AND PAID MY DUES BUT I SERIOUSLY WONDER WHY AS I NEVER SEEM TO BENEFIT FROM THIS GOD HELP ME WHEN I HAVE TO RETIRE

by Anonymous, 2 years ago

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Thanks for your comments!

by Hannah from money.co.uk, 2 years ago

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In the news recently, it was stated that alcohol was the worst cause of liver disfunction and drunkeness causing hospitalisation and sometimes death. What I would like to know is why the Government doesn't do anything to deter the louts who constantly get drunk and cause problems for the public, the police and hospitals. People who smoke, although it is not a healthy habit, don't do this, yet the price of cigarettes has gone up by 37p per packet and NOTHING on alcohol. Alcohol related problems is much wider spread than that of cigarettes and I for one (not a smoker) cannot relate to the Government's reasoning on this. I have seen the drunks who pour out of the pubs and clubs at night causing havoc, they want to fight, they pester passers by, some end up in the gutter where they have fallen and can't get up, police are called to sort things out when their time could be better spent. What a world we live in - in my opinion we should look for another 'Maggie Thatcher'.

by mayflower, 1 year ago

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