Budget 2008: What it means for your money

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Thursday 13th March 2008

The Budget can often be confusing, with minor changes made to some business taxes and the usual hikes on cigarettes and alcohol.

But there are always announcements worthy of note - and this year is no different, with Britons facing a range of potential financial effects.

For those who are feeling lost, here is a summary of some of the main points to be paid attention in this years Budget.

Stamp Duty

One of the biggest issues in the news ahead of the Budget was stamp duty and ways in which it could be made easier for first-time buyers to get on to the housing ladder.

Chancellor Alistair Darling stopped short of changing the stamp duty thresholds this week, but he did make things a little easier for some people.

This included a promise to waive stamp duty on shared ownership schemes until the purchaser buys 80 per cent of the home.

First-time buyers and key workers who can only afford half of a property are now told they can expect assistance from shared ownership schemes.

Previously such programmes were only open to those who could pay 75 per cent or more of the asking price, Mr Darling pointed out.

Pensions

From April, Britons in retirement are told to expect a minimum weekly income of £124 from their pension credit.

Along with this, some 600,000 elderly residents are to be taken out of paying income tax - although the chancellor notes that this is due to changes made last year.

Winter could also prove a little more comfortable with the promise of an extra £50 to be added to the fuel allowance for the over-60s, taking it to £250.

For the over-80s, meanwhile, an extra £100 is to be made available, taking their allowance up to £400.

Transport

Unsurprisingly, transport rears its head in the 2008 Budget, with the chancellor suggesting that "radical steps" are required in order to reduce congestion.

One suggested approach is to introduce road pricing - with Mr Darling pledging to invest in developing the technology required to put such a system in place.

By April 2010, he proposes to base road tax on the cleanliness levels of a vehicles engine.

This could mean a higher tax rate for the most polluting cars and "no tax at all" for the cleanest new cars available.

More immediately, the 2p rise in fuel duty due to be introduced in April is now to be postponed until October.

"I want to support the economy now and help business and families," Mr Darling explained in his speech.

Cigs and Swigs

Always among the most hotly debated topics are the increases typically put on alcoholic beverages and tobacco.

This year is no exception - with Mr Darling noting that his speech was delivered on No Smoking Day.

He expressed a desire to help people to quit the habit by continuing to charge a reduced rate of VAT on "smoking cessation products".

But for those not planning to quit the news is less rosy - as of 18:00 GMT on the day of the announcement, 11p was put on to the price of 20 cigarettes and a more modest 4p on a pack of five cigars.

Drinkers can also expect to be out of pocket, although their price increases are not to materialise until midnight on Sunday.

After that time, a pint is to rise by 4p, cider by 3p, spirits by 55p per bottle and an extra 14p is to be charged on each bottle of wine.

While this represents six per cent over the current rate of inflation, Mr Darling stated that in each of the coming four years the increase is to be set at two per cent above inflation.

But Rob Hayward, chief executive of the British Beer & Pub Association, warns that the monthly tax bill to "the millions of people who enjoy beer" is to total £50.5 million. ADNFCR-8000200-ID-18508423-ADNFCR ©