Chancellor George Osborne has given his first annual Budget following the general election and unveiled some big changes.

All the major announcements are set out below, so you know how your finances will be affected by Mr Osborne's budget.



  • The annual ISA savings allowance will go up to 20,000 in April 2017

Lifetime ISA

  • A new Lifetime ISA for under 40s will be launched in April 2017

  • It will allow under 40s to save up to 4,000 per year and boosts savings by 25%, so for every 4 you save they will pay you 1

  • Money can either be put towards a deposit on a first home worth up to 450,000 or accessed tax free when you turn 60

  • Savings can be taken out at any time but you will lose the government bonus and be subject to a 5% charge

Help to Save

  • New Help to Save account for low paid workers on Universal Credit or working tax credits

  • Savers can pay in up to 50 month and for every 1 they save 50p will be added by the government

  • Bonus could be worth up to 1,200 over four years


Income Tax

  • Tax free personal allowance to go up to 11,500 in April 2017

  • The 40% higher rate tax threshold will also rise from 42,385 to 45,000 in April 2017

Capital Gains Tax

  • Rate will be cut from 28% to 20% and from 18% to 10% for basic rate taxpayers

Insurance Premium Tax

  • 0.5% rise in Insurance Premium Tax, up from 9.5% to 10% from October 2016

  • Money raised will be put towards flood defence spending

Other tax

  • Class 2 National Insurance contributions are being withdrawn from April 2018, simplifying the system for self employed workers

  • Air Passenger Duty rates will increase by the Retail Prices Index (RPI) on 1st April 2016

Alcohol, fuel, sugar & tobacco

  • Beer, cider and whisky duty all frozen

  • Fuel duty to be frozen for sixth year in a row

  • No change to tobacco duty which will continue rising by 2% above inflation

Sugar tax

  • A new levy on sugary drinks will be introduced in two years' time

  • Money raised from the new tax will fund sport in schools


  • The Money Advice Service has been scrapped

  • Toll to be halved on the Severn Bridge from 2018