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Published on March 21st, 2013 | by Pete

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Ultimate 2013 Budget Guide for Busy People

So, the budget has been announced for another year. Lots of complicated discussions will now follow about what is good and what is bad. So here at MoneySuperstar, we thought we would outline the key points for you, because we’re nice like that.

Income Tax

The limit at which people start paying tax is to be raised to £10,000 in 2014 – a year earlier than originally planned. Good news for low earners.

The Economy

The growth forecast for 2013 has been halved to 0.6% from 1.2% in December, and in addition the Office for Budget Responsibility (OBR) watchdog predicts the UK will escape recession this year. Growth is predicted to be 1.8% in 2014; 2.3% in 2015; 2.7% in 2016 and 2.8% in 2017.

Borrowing

The OBR predicts borrowing of £121bn will be necessary this year, the same as last year, and that £120bn will be needed for 2014-15. Chancellor George Osborne says the deficit as a share of GDP will fall from 7.4% in 2013-14, to 5% in 2015-16. Currently, the debt as a share of GDP is scheduled to increase from 75.9% this year to 85.6% in 2016-17.

Housing

Shared equity schemes are to be extended, with interest-free loans for homebuyers up to 20% of value of new-build properties. The idea is that the Bank of England will guarantee to underpin £130bn of new mortgage lending for three years from 2014, in an effort to make it easier for first time buyers.

Cigarettes, Alcohol, and Petrol

September’s 3p fuel duty rise has been scrapped. The 3p rise in beer duty planned for April has also been scrapped, and instead, beer duty will be cut by a penny. Finally, cigarette duties remain unchanged, meaning they continue to rise by inflation +2%.

This is not an exhaustive list of changes, but it is a quick guide to what is happening financially in the UK at the moment. As always, there will be winners and losers, but the good news is, we can all cheer up with an ever so slightly cheaper beer. Cheers!

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