Tag Archives: Budget

Osborne Calls Emergency “Stability” Budget

Following the Conservative victory in the UK’s general election, George Osborne has announced a new budget to be delivered on the 8th of July this year. The unusual move of delivering an extra budget is, he said, part of the government’s efforts to “deliver on the commitments we have made to working people” as soon as possible.

Previously, Osborne delivered the annual budget on the 18th of March. Through an article in national newspaper The Sun, he acknowledged that inserting an extra budget mid-year was an “unusual” step to take. However, he said that it was down to a desire to make “promises made in the election into a reality” with the minimum of delay.

The “stability budget” to be held in July will, Osborne claimed, concentrate with “a laser like focus” on improving UK living standards through raising economic productivity.

The chancellor has given a rough outline of the plans he expects to deliver in this budget in a conference outside 11 Downing Street. However, he would not yet go into any details of pertinent issues such as plans to make £12 billion worth of cuts to welfare. During the election campaign, the party provided details of how £2 billion worth of cuts would be achieved, but the remaining £10 billion remains unaccounted for in the details so far released.

While Osborne would not go into specifics about how the government’s goals would be achieved, he was happy to outline what the main goals are. The budget will, he said, represent a continuation of a “balanced plan” from the government to reform welfare, reduce government debts, and invest in the National Health Service. The welfare reforms, he said, would focus on efforts “to make work pay.” However, he refused to give any indication of where or how they would make the planned £12 billion of cuts to welfare funding. He only said that the government wanted to create “a welfare system that’s fair to the people who pay for it” but would “always protect the most vulnerable.”

Osborne also said that the government will increase NHS funding each year, continue cracking down on tax avoidance, and help to create new jobs including an extra three million apprenticeships.

Labour’s Caroline Flint, shadow secretary for energy and climate change, said that the Tory election campaign has involved a number of “uncosted promises.”

“It will be interesting,” Flint continued, “to see who is going to pay for those uncosted policies when they bring in the budget in July.”

How the 2014 Budget Affects You and I

The Budget plans of the chancellor George Osborne affect us all.

The biggest change this year seems to be regarding pensions. Pensioners will no longer be required to buy an annuity, but will be able to access their cash lump sum and use it as they wish. Although this change has been criticised as it could mean that some pensioners may become liable. As they may fall into a higher tax threshold, which means they will need to pay tax at this rate. This also means that they may need to pay the income tax earlier, rather than in stages. Pensioners will be able to obtain free financial advice to help make these decisions.  However, this will not affect pensioners who have an existing annuity. On another note, pensioners who enjoy playing bingo will be pleased to hear that the duty on bingo has been reduced to 10%.

From January, the over 65’s age group will have the opportunity to save in a 1 year bond at a rate of approximately 2.8% or a 3 year bond at a rate of 4% if they wish to.

Many savers will be pleased to know that the tax-free limit on Individual Savings accounts has been increased to £15,000 and the 10p tax rate on savings will cease to exist.

To help families the Help to Buy scheme will extend to 2020. From next September the government will also provide 20% of childcare costs tax-free to parents who pay 80% of childcare costs to a registered provider. The chancellor will bring changes to fuel duty, which will benefit families by approximately £15 a year.

There will be an increase by 2% over inflation on tobacco and taxes on alcohol will increase above inflation, with the exception of ordinary cider and Scottish Whisky. However, beer duty will be cut by a penny which will reduce the price of beer.

The personal allowance will increase to £10,500 for everyone in 2015 to 2016. This will be a relief to many taxpayers.

So as the austerity plan continues and taking into account the economic situation, there does seem to be a few changes made, in an attempt to benefit the majority of people and balance out the economic situation in the UK.

Buying a Car on a Budget?

When thinking about purchasing a new car in today’s financial climate which is the best option for people on a budget?  Nowadays many people can opt for different ways to get a car: used, leasing or new car offers – but which is the best choice?

For people on a budget they have to buy within their means. The cheapest way to obtain a car is buying used/ pre-owned. A benefit with buying this is that most of the time a new car will decrease in value by 25%-40% – this is a significant loss accumulated over the first two years. So why not let someone else take the percentage decrease? Purchasing a slightly used car that is two years or older could prevent from this drastic depreciation occurring and provide you with a cheaper deal. Obviously the negative with a used car is the fact you can never be guaranteed the car is in working order, although most cars have long warranties that may still be in effect.

Leasing a car is an option that has appealed to many people. Leasing a car has advantages and disadvantages that many should consider. A large payment isn’t needed to be put down on the vehicle, it only tends to be the first months payment, taxes, registration and security deposit amongst a few others. When you have reached the end of the lease you don’t have to worry about selling it on. The negatives with leasing are no damage can occur to the car, the agreed mileage needs to be met otherwise servicing can be refused, no modifications can take place as you technically don’t own the car and you will need maximum insurance cover.

Dealerships at the moment are trying to retain customer loyalty; one way they are doing this is through offering cars on finance. With many new car offers available at the moment a deal can be easily found with little deposits needed and low monthly fees. Take for example with this Hyundai dealership, a new Hyundai i20 can be financed with a deposit of £159 and the same price per month. Offers like this are very appealing for people on a budget as the cost is spread out and a lot easier to handle. The customer will have the peace of mind that the car will be under warranty and perhaps less will go wrong with a new car than a used car might, tax will be low and less costs will be carried out on maintenance. There are disadvantages however with depreciation occurring within the first two years, and some offers do contain high interest rates so it is always worthwhile checking the interest rates with each offer.

There are many advantages and disadvantages of the different ways to acquire a car. Weigh up each decision and decide whether or not it will suit you and your finances available. Don’t jump in at the first offer available shop around and try to find the best deal out there for you.

How General Economy Affects Your Budgets

Budgets are often made based on economic factors that arise in different areas and times of every country or the world itself. Without a consideration for economy, budgets can instantly fail. Economy involves the supply and demand, the prices of products and services and the ability to predict the future prices of products and services, which would greatly be helpful in determining the next financial step in the future.

Economy deals with supply and demand. When a country’s industry sector is strong, there can be a surplus of items. Surplus, by definition, are excess items that would be sold at a lower price to be rid of, regardless of initial costs as it is doing well in exportation or local sales. Clearly, the lower price is because of the lacking demand for the items or services. The higher price of items can be due to the demand while having a lacking production of the products and services.

Knowing these basic principles, you can determine that the items you can purchase today and the services you enjoy today can rise or fall depending on the outlook of the product or service’s original country. In making your budget, take into consideration the economic outlook; if the prices will go up or go down, then decide purchasing items based on quality and quantity.

Quality and quantity are two different things. High-demand products that are deemed “needs” by the public are usually mass-produced and have lower quality. High quality items that are also needs are essential depending on their price and the future “demand” for them, especially if their manufacturers are limiting the supply in the near future.

General economy, even the oil industry, affects everything including your budget. Oil affects the prices of sending goods; when the oil prices are high, chances are the items you receive get higher prices as well.

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