Key points from the 2009 Budget

Well we got two predictions from the Budget right, Alistair Darling didn't say "sorry" and he didn't wear a black tie. After that things got a bit tougher! Here's a short summary of personal finance key points in the Budget that could affect you.


The increase on the annual ISA limit from £7,200 to £10,200 (with the same percentaqe rise in the cash ISA limit, taking it to £5,100) should boost saving money next year. Unless, you happen to be 50 or more in which case you can invest more from October this year.

Stamp duty on house purchases

No surprises here - the "holiday" was confirmed until year end, when the threshold drops back down to £125,000. Our saving tip is to do your sums now to see whether saving up a bigger deposit and getting a lower interest rate later in the year will be worthwhile if the downside is that you have to pay stamp duty if you miss the year end cut off. We don't think that arguments that the threshold should go up to £250,000 will influence the Chancellor - it's definitely risky to miss the cut off date over this. A lot of what you'll have to work out will be based on how much is available to lend by then, which brings us (a little indirectly!) to..

HomeBuy Direct

The government have pledged to make another £80 million available through its shared equity scheme where a house builder shares in the equity with you. It's worth checking out what's available in your area with local builders.

Car scrappage

Although the scheme was announced, it's not as useful as hoped for, as the discount applies only to the retail price, and for brand new (pre-registration "special deals" don't get in) cars only. It's probably still a helpful scheme if you have an old car that you are going to trade in anyway for a low cost new car.

Income tax, pension contribution tax relief and personal allowances

We've put this last, simply because it'll affect relatively few people for now. Those affected will have plenty of experts to give them detailed advice on how to save them from the worst of the downsides of paying high levels of tax. Whatever else, we think that the possibility of a "brain drain" is overstated - moving to the Isle of Man just isn't feasible for the owners of many businesses (and would you go there for the sunshine?).What is worth looking out for is that the 50% rate at over £150,000 isn't indexed, which means that more people are going to fall into the band. However, it's estimated that it will take about 10 years for somebody now on £100, 000 a year to move into the highest rate, so most people will have some time to plan ahead.

And that's the message really - plan ahead to get the most from the Budget.

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