Pre-budget report: How it affects you

Published on Wednesday 9 December 2009 14:23

CHANCELLOR Alistair Darling today delivered his crunch Pre-Budget Report, but what does it mean for you?

NATIONAL INSURANCE

Workers will hand over an extra 1% of their pay to the Government from April 2011 after the Chancellor announced a further rise to National Insurance contributions. Mr Darling said that NI rates paid by workers, employers and the self-employed would rise by a further 0.5% from the start of the 2011/2012 tax year. When combined with the 0.5% rise for April 2011 already announced in this year's Budget, today's measures mean NI rates are rising by 1%.

PUBLIC SECTOR

The Chancellor announced plans to cap public sector pay rises to 1% for two years from 2011. He said that contributions from the state to the pensions of teachers, local government and health workers and civil servants would be also capped, saving 1 billion a year.

The Government said the senior civil service pay bill would be cut by up to 100 million over three years and any new government appointment over 150,000 and all bonuses over 50,000 would require Treasury approval.

YOUTH UNEMPLOYMENT

The Chancellor unveiled a package of measures to boost employment, including help for young people looking for a job. With youth unemployment nearing a million, Mr Darling said more help was needed for the age group, as well as for older workers. He told the Commons that, from next month, no-one under 24 needed to be unemployed for longer than six months – down from the current 12 months – before being guaranteed work or training. The Chancellor also confirmed plans to give a guarantee of a place for every 16– and 17-year-old in education or training again in September 2010.

GOING GREEN

A new boiler "scrappage" scheme to help 125,000 households replace their old boilers with new, more efficient models was among a series of green measures in the PBR. Mr Darling said the programme, similar to the trade-in scheme for cars, would enable the installation of more efficient boilers for heating and hot water in houses to cut greenhouse gases and domestic bills.

He also announced that householders with wind turbines or solar panels on their homes who feed excess power back into the grid would receive an average of 900 a year under the "feed-in tariff" scheme which starts in April – a payment which would be tax-free. And an extra 200 million would go to helping people make their homes more energy-efficient through measures such as insulation, supporting an additional 75,000 households.

PENSIONERS

Mr Darling gave a boost to pensioners announcing a 2.5% increase in the state pension next year. And there was laughter from MPs when he announced a cut in bingo duty.

TRANSPORT

Mr Darling gave encouragement for firms to build up fleets of electric cars. He also reassured any doubters by insisting that large transport projects such as the 16 billion cross-London Crossrail scheme would be unaffected by the recession. But for those hoping for Mr Darling to go back on the decision for a second hike in the Air Passenger Duty (APD) airport departure tax there was disappointment.

And while Mr Darling refrained from announcing any immediate rise in petrol prices, the planned 1%-above-inflation fuel duty increase in April will go ahead.

Workers to pay more in National Insurance

Extra 23m for Scotland