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The Chancellor delivers his Budget today with attention on easing family finances and any change in income tax.
He will also deliver his verdict on the state of Britain’s finances with the economy having enjoyed a period of sustained growth causing independent forecasts to be upgraded.
But what does this all mean for you? As George Osborne speaks and throughout the day This is Money will be live blogging analysis, reaction, charts and data and what the experts and you the readers are saying in reader comments and on social media.
Follow it below.
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Here’s a final round-up of our coverage – check back tomorrow and in the days to come for what is sure to be fascinating analysis and reaction.
Happy Budget Day, Ed
BUDGET 2014 WINNERS AND LOSERS: Who gains and who’s in pain after George Osborne’s speech
Budget delight for savers: Tax-free Isa limit will increase to £15k from July, ALL of it can be held in cash and you can transfer over equity pots
Here’s a couple of graphs from this year’s Budget to show how your money is being spent, and which taxes collect the most.
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Some straightforward grumbling from the National Association of Pension Funds. It complains that allowing retirees to get all their pension cash so easily could lead to them blowing it too soon.
Joanne Segars, Chief Executive, NAPF, said: ‘It is concerning that there appears to be little robust modelling to reassure us the Government has understood the risk that a number of people will run through their pension pots far too quickly. We fear these reforms, without careful scrutiny, will leave a large swathe of people vulnerable to poverty in old age. ‘
This really is an important day for how ordinary people will organise their personal finances in the future, particularly at retirement.
Also being announced today are pensioner bonds, issued by National Savings investments. Launching in January 2015, NSI will be offering a one-year bond that is expected to pay 2.8 per cent and a three-year bond that will be paying 4.0 per cent.
Danny Alexander has written for Mail Online about the Lib Dem role in the changes today – in particular the lack of further action on the 40% tax band….
We ignored siren voices in the Tory party on 40p tax rate to deliver £100 tax cut for all…
The Association of British Insurers have responded to the Budget. It’s members stand to lose from changes that will no longer require pension savers to take an annuity.
But it’s looking on the bright side. Otto Thoresen, Director General of the Association of British Insurers, said: ‘The guaranteed lifetime income provided by an annuity can play an important part in discussions with customers considering their options.
‘These changes represent a significant challenge for everyone involved in helping people secure their retirement income. The insurance industry has already introduced reforms to help customers get the best retirement deal, and we look forward to playing a key role in ensuring that these reforms deliver better outcomes for customers.’
Much of the attention will be on the extra flexibility the changes will give those approaching retirement. But look closely and you see the change will mean a saving for the Government over the long term.
This chart shows how the reforms will start cutting costs for the exchequer in 2030.
That’s because the Government expect many more people to take large amounts of their pension savings as cash, and pay their marginal rate of tax when they do so. This is instead of the situation now when many take their pension as an income, most of which is underneath the personal tax allowance, which is being raised to £10,500.
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There will a be tremendous amount of work being done at large insurance companies following the pension reforms today. These giant companies have had a captive audience of pension savers who they have been able to usher into poor-paying annuities without much trouble.
But the game has changed.
Those with pension pots to cash in will be able to take far more of it as cash before they think about an annuity, and many won’t bother with one at all.
Here’s the share prices of companies affected today…
Resolution tumbled 10 per cent or 33.60p to 317.40p, while Legal General fell 13 per cent or 29.70p to 200.80p.
Aviva slid 6 per cent or 31.55p to 485.45p, Standard Life shed 5 per cent to trade down 6 per cent or 23.55p at 341.85p, and Prudential was down 2 per cent or 31.50p at 1,337.00p.
After a bit of digesting. Here’s links to our coverage of the major announcements…
Budget delight for savers: Tax-free Isa limit will increase to £15k from July, ALL of it can be held in cash and you can transfer over equity pots
The Treasury has created some diagrams to show the changes giving retirees greater freedom to access their pensions….
spt_chart 3.png
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From April 2015, you’ll be able to get your hands on your defined contribution pension cash – all of it – and pay no more tax than your current marginal tax rate. You’ll still be able to get 25% tax free, as now, and the rest by paying tax at your marginal rate.
You will not have to buy an annuity.
The government will introduce a new guarantee that everyone who retires with a defined contribution pension will be offered free and impartial face-to-face guidance on their choices at the point of retirement.
Reform of taxation of defined contribution pensions to help 13 million people
from March 27.
Cap on Premium Bonds to be lifted from £30,000 to £40,000 in June and £50,000
in 2015, and number of £1 million winners to be doubled.
New Pensioner Bond paying market leading rates to be available from January to
all over 65s, with possible rates of 2.8% for one-year bond and 4% for
three-year bond.
Isas are getting more generous. You can now put in £15k people!
New Isa limit of £15,000 and that can be all cash, all equities or any ratio in between.
‘Hard-working people!’
And what do HWP love – Bingo of course, and that’s getting cheaper.
Very little movement in FTSE 100 after better news on the economy….
spt_chart.png
Channel 4′s Faisal Islam is easily pleased.
“more ebb than fleet” is a brilliant joke, must admit, re Labour’s new town lethargy.
— Faisal Islam (@faisalislam) March 19, 2014
The first part of the controversial Help to Buy scheme is being extended to 2020, as already announced.
GO also lists new housebuilding in Barking Ebbsfleet.
We don’t have to wait long, but latest guess is that we could get a cut to savings tax. Here’s saving and retirement expert Ros Atmann…
A cut in taxes o nsavings income is equivalent to raising rates – and at current int levels won’t cost that much!
— Ros Altmann (@rosaltmann) March 19, 2014
GO says growth forecast upgraded to 2.7%, as forecast.
Has a dig at Ed Balls.
Chancellor of the Exchequer George Osborne delivers his Budget statement to the House of Commons, London. PRESS ASSOCIATION Photo. Picture date: Wednesday March 19, 2014. See PA BUDGET stories. Photo credit should read: PA Wire
GO says that savers will be at the centre of the budget. It’s about time.
Let’s see what help they’ll get…
Long-term economic plan!
I win.
You can bet we’ll plenty about ‘hard-working families’, ‘a balanced recovery’ and ‘our long-term economic plan’. But what else?
What are your Budget Bingo entries?
Cameron and Miliband playing second fiddle at PMQs now.
The PM sure to be careful not to hint at any good or bad news to come from George, having been slap on the wrists for giving away too much in the past.
Intriguing from Peston, via Dan Milmo…
Robert Peston: Osborne’s budget surprise is something “unbelievably clever.”
— Dan Milmo (@DanMilmo) March 19, 2014
Ed Conway from Sky with a history lesson, and why we should be thankful times have changed.
Bwin.com is giving odds on the length of Geroge’s speech this time…
over 55 minutes long – 9/10
Under 55 minutes – 4/5
Benjamin Disraeli’s 1852 Budget speech was so long (5hrs) it included an interval. However he also delivered the shortest (45mins in 1867)
— Ed Conway (@EdConwaySky) March 19, 2014
Some of our writers have put down their Budget hopes, dreams, wishes and fears in the past week. Enjoy.
SIMON LAMBERT: What should the Chancellor do on Budget day? Take an axe to these bad taxes
If you’re looking for a rabbit out of the hat, it could be stamp duty. Here’s the head of tax from the Association of Chartered Certified Accountants…
The UK Budget today, 19th March. Mr Osborne seems to have listened to ACCA and will do something on the cliff edges of stamp duty.
— Chas Roy-Chowdhury (@roychoc) March 19, 2014
As a reminder of why you should take the OBR’s growth forecasts with a pinch of salt later on, here’s a graph showing each of it’s estimates since 2010…
chart 2.jpg
There’s always pleading for tax cuts in the run up to the Budget but it’s been louder than usual this year. The ‘fiscal drag’ that means more people pay 40% tax on some of their wages is centre of attention.
Raising the threshold at which workers start paying 40% tax would address this, but so far ministers have insisted any giveaways should be aimed lower – at the personal allowance we can earn earn each year before we pay any tax.
Here’s our story on the potential changes.
On the state of the economy, independent forecasts for growth have been upgraded and it seems likely the Office for Budget Responsibility will follow suit with higher GDP predicted for the coming year.
In December the OBR thought the economy would grow by 2.4 per cent in 2014, but this could be upgraded to around 2.7 per cent today.
News on debt and the deficit might be less encouraging. The Chancellor has already abandoned original plans to clear the deficit by next year and the total for this year could be as high as £111bn. However, improved performance of the economy could mean deficit forecasts for the coming year are lowered.
Chancellor of the Exchequer George Osborne will update us on his tax and spending plans today and has promised a Budget for a ‘resilient economy’, and a shiny new pound coin – look.
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Comments (13)
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The comments below have been moderated in advance.
kahlesstiberius,
london, United Kingdom,
5 hours ago
they promise much and deliver nothing, typical political lies, every time.
britcas,
York, United Kingdom,
5 hours ago
What a great budget. I am just going through treatment for my second cancer. This now means I can withdraw my tax free lump sum and top up my income but leaving money to my wife when I die which Wi’ll likely be before state retirement age. Also to clarify my social standing I have never been paid the average salary always below. Nut still raised a family and own my own house. Smaller than I had hoped but I needed to save for my future. Unfortunately not as long advice expected
KatyC123,
Manchester,
6 hours ago
How this idiot with a 3rd class degree in history got this job is unbelievable.
Tim Nice but Dim,
Posh part of London, United Kingdom,
6 hours ago
The man couldn’t balance a see saw, and hes trying with the economy?
Winston Smith,
Hersham, United Kingdom,
6 hours ago
FRAUD ALERT – the personal allowance increase is clawed back above £40,000. You’ll get less until £121,000 and after that you are actually worse off as he has manipulated the impact on the 40% rate. We now have a 62% rate from £100k to £121k.
This is a budget to bribe pensioners to vote Tory at the next election as they seem to be the main beneficiaries – reduced savings tax and bingo duty.
RH6mre2,
Dead End, United States,
6 hours ago
Problem with the UK: Benefits – out of control; Immigration – out of control; EU – out of control; NHS – out of control and there will never be enough money coming in to pay for it all. Until we have the guts to take tough decisions and get spending really under control, we will have no hope of this situation ever improving.
MAIL MAN,
Liverpool, United Kingdom,
6 hours ago
Only people with money benefit from the ISA change, £15k savings each year. A worker earning minimum wage on 40hrs a week only get £13.5k per annum.
Luco,
Essex, United Kingdom,
6 hours ago
Lots of promises and aren’t we doing wonderful things, when in reality are we better off than last year, or the year before that etc. No will be the answer for many and a financial recovery based on consumer spending, much of which may be borrowed simply is not sustainable.
The gimmicks, the sound bites and the rhetoric do not fool me. The budget ignored one very simple fact, many workers are struggling and he has done nothing to change that.
britcas,
York, United Kingdom,
5 hours ago
Karezza,
RISHI THIS, United Kingdom,
6 hours ago
I was really disappointed with the Budget. I was expecting a one million quid handout from the government.
Paul,
London, United Kingdom,
7 hours ago
Again he talks about missing his 2010 target of a balance budget in 2015. The only thing we can believe!!
JN Wiltshire,
Wiltshire,
6 hours ago
Paul,
London, United Kingdom,
5 hours ago
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LIVE BLOG: Analysis, reaction, and the verdict on the Budget 2014
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