/ Money

Budget 2012 winners and losers – what’s your verdict?

Cartoon man with question marks in head

So, how was it for you? According to the opinion poll we carried out straight after the Budget, most were unimpressed. Six in ten felt the Budget would make no difference or would be worse for their family.

Generally the mood remains distinctly downcast following yesterday’s Budget, with 73% of the 2,083 Brits we asked expecting little or no improvement to their household finances over the next year.

So, as the dust settles, let’s have a look at some of the Budget in detail and work out the winners and losers.

The Budget 2012 winners

At first glance, the winners look to be higher-rate tax payers (earning over £150,000), who will see their tax rate fall from 50% to 45% next year.

Slightly less wealthy winners are couples who were in line to lose their child benefit because one of them was a 40% taxpayer (earning over £42,475).

Previously, households where a single parent was earning just over this threshold (say £43,000) would not get any child benefits. This is compared to couples earning as much as £80,000 between them still receiving benefits, as neither were in the 40% tax bracket.

This has been addressed by the Chancellor with the introduction of a graduated withdrawal of child benefit. Once one partner earns £50,000, child benefits will be reduced by 1% for every additional £100 earned. Only those earning more than £60,000 will lose all their benefits.

And to a certain extent we’re all winners; at least the 29m of us who pay tax. This is because your personal allowance (the slice of your income that’s kept tax-free) will be increased to £9,205 in 2013. It was the most popular measure among our pollers, with 92% in favour.

That’s apart from higher-rate taxpayers, as the threshold at which they start paying 40% tax will be dropped slightly to claw some money back.

The Budget 2012 losers

Still, the extra money most people will get is hardly a king’s ransom. This year the extra tax-free amount you can keep will result in £126 less tax. And it’ll be around £220 from April 2013 (or £18.30 a month).

No wonder the people we asked weren’t more enthusiastic. Nearly two-thirds said the Budget would make no difference to their plans to make large purchases, and half said it wouldn’t make a difference to their ability to pay for day-to-day essentials either.

But, in a ‘simplification’ of personal allowance, pensioners are the real losers of the Budget. Currently pensioners get a higher personal allowance than everyone else. In 2012-13 it’s £10,500 for those over-65 and £10,660 for over-75s.

However, from 2013 these rates will be frozen, while allowances for under-65s will increase. Eventually the gap will be eroded completely and we’ll all be getting the same.

Is this fair? Is it a major loss? I suppose that depends on how old you are, and how high your income is. Age-related allowance is means-tested already, so wealthier pensioners won’t notice much difference, but the poorer ones will lose out.

Tax evaders should lose out too – but nobody feels much regret for them. George Osborne described them as ‘morally repugnant’ and announced a raft of measures to make their lives uncomfortable. That at least should cheer the rest of us up – and help the government balance its books.

So what’s your Budget 2012 verdict? Have any of these measures made you feel more confident about your finances?


To me as an OAP on state pension – I will be losing. It didn’t surprise me – I knew the Tories would punish us somehow. I hope the Tories will lose the next election decisively I can only assume the increase in death rates of OAPs will free more houses for the pampered (comparatively) young to enjoy.

Zuludawn says:
22 March 2012

I sometimes wonder whether people really understand how serious everything is, irrespective of how we have arrived here, a certain % continually moan about everything, I hear endless ‘experts’ saying the government haven’t done enough, they haven’t been creative enough, blah blah, But NO suggestions as to what the alternatives are. The reason is there is not one single idea out there that will fix the problems apart from buttoning down the hatches and trying the best we can to deal with the situation we are in. As for the so called rich, many of them are self made, use their talents, create employment, create wealth, pay already high taxes. I run a business that employs 24 people. That’s 24 people employed, in work, earning! reason our business is successful because of a few individuals that have worked their backsides, and equally the people in our business are highly motivated and want to achieve. This budget was never going to appease everyone, it certainly wasn’t going to make many happy, did anyone really think it would? Lest not forget who was asleep at the wheel over the past 12 years, they were responsible for running this country,..,they were as bad as the bankers!


Generally I thought Budget 2012 [as it is now called in guv speak] was satisfactory and in line with expectations. The Chancellor has probably not explained the changes to the age-related personal allowances sufficiently and the outcry about the implications for the rising 65’s, and ultimately all pensioners, should have been predicted. I can see no moral justification for pensioners having a higher personal tax allowance than working people. I expect the Chancellor to get out of this particular scrape by raising the winter fuel allowance – after all, keeping the heating running all day is the major burden on pensioners not experienced by people who work in a factory or office building and the allowance is per household and not per person. While he was in the business of removing the cliff-edge from child benefit entitlement we had hoped for some loosening of the inequitable stamp duty land tax thresholds and percentage rates which are stifling the housing market [although it has to be said that the £250,000 threshold – where 3% on the whole price kicks in – is having the effect of forcing down the price of property in the £250-265K bracket]; NB – the foregoing remark is probably offensive if you happen to be seeking a property in the south east so apologies for mentioning it.

Sue says:
23 March 2012

I totally agree with Zuludawn and John Ward. Hopefully this budget will get this country back on its feet which it needs to do before anything else. Stop moaning, we’re all in this together. Labour always criticize but never come up with a sensible solution. Look at the mess they made of the country while in power. They were going to put fuel up by 10p, if they had stayed in power, have people forgotten that. I’m an OAP and will get a £5 increase in my state pension from April + the benefit of free bus travel and free prescriptions and concessions. Some people just take this for granted. The media are partly to blame with all there negative reporting and scare tactics without looking at all the positive facts.

David says:
23 March 2012

I am 79, but the Granny Tax will make little difference for me because my pensions add up to over £25,000. So my allowance is now the same as someone much younger who is still earning salary, and that will go up by something over £1000. You think I don’t pay any income tax on the DSS pension? By a sneaky sleight of hand they add that to my occupational pension for the purpose of calculating what I have to pay.
But I haven’t got much to complain about. I paid in for 40 years so I can live reasonably well, even though most of what I earn goes on food and diesel fuel. I get free prescriptions, a bus pass and all those other goodies. So what’s my beef?
Briefly this: I know so many pensioners who have £10,000 to 15,000 a year. They will rub along, with difficulty, for a year or two, buying the cheapest food, not going out too often, turning down the heating and putting on an overcoat and a scarf and gloves when the winter is cold. But if their allowances are not indexed in future they will find the price of everything rocketing up and they will suffer in silence until they starve or suffer hypothermia, if they haven’t already gone with cancer, heart attack, pneumonia or stroke. Meanwhile Mr Moneybags the millionaire has his tax bill going down so that he saves as much in one year from the tax man as the pensioner receives in five, after having worked hard for forty years to ensure dignity and security in old age,.And then there are those who don’t even get £10,000. What happens to them doesn’t bear thinking about.
Mr Gideon George Osborne and Mr David Cameron, millionaires both of you – can you, in your blackest moments, imagine being in that state in forty year’s time? Of course you can’t. You have no idea what difficulties old people face when they haven’t a rich inheritance from Papa and Mama.
One nation toryism went years ago. Now it is just the rule of the smug and self-satisfied over everybody else. Shame on you!

Owen says:
23 March 2012

Whilst I have no objection in principle to the so called “granny tax”, I do feel that the chancellor was disingenuous when he said that the pensioners would still be getting an increase and would be better off. This is only true if you look soley at the cash amounts. Inflation means that pensioners will be worse off. Presented properly as a small increase for pensioners who had so far escapes the worst of the cuts, it would not seem unfair. I shouild add that I am one of those who will suffer as a rsult of this tax change.

Brian says:
23 March 2012

It no supprise a granney tax on the old, a nice target.
For rich tories allways been the same.
Rich do well old lose out.

Snowdin says:
23 March 2012

My wife and I are pensioners approaching 65 but the online calculators suggest we will be slightly better off next year, “in cash terms,” as the politicians are keen to say. Let’s forget about inflation, eh? The patronising nonsense about pensioners not being able to understand forms and “how we gave the pensioners the biggest rise ever” are simply the usual lies that are standard practice for politicians. It does, however, seem ridiculous that pension rises are based based on the randomness of inflation in any given September. I presume this must have been because at some time September was reliably the month of lowest inflation, but September 2011 was a nice surprise for once. My real concern, however, is for the young people entering work. They do need some taxation fairness because they will be paying off the debt left by our generations almost ad infinitum. Not only can they not get on the housing ladder (a good thing in recent years with falling prices despite Brown trying to manipulate the market), but they have huge increases in their own lifelong pension costs, they have to pay our unfunded pension costs and those of private sector workers as we live longer, some have university loans to pay off, and they keep getting stuffed with extra new costs like the recent Post Office Pension Scheme transfer. It can’t be as much fun being young at present. I think we have to accept our fair share of the hardship.