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?