Pensioners and savers set to benefit from the Budget

Bradford Telegraph and Argus: Chancellor George Osborne Chancellor George Osborne

George Osborne unveiled an aid package to encourage new routes from regional airports – but Leeds Bradford Airport will miss out.

The Government will pay half the charges faced by new carriers for three years, in a bid to encourage them to choose smaller regional airports.

The help will cover fuel costs, landing charges and baggage charges and any fees to help the development of an airport, but not air passenger duty, Treasury officials said.

But – crucially – only airports with under three million passengers this year will benefit. Around 3.3m people flew from Leeds Bradford last year.

Bradford South Labour MP Gerry Sutcliffe criticised the strict criteria, saying: “Our airport needs infrastructure spending on road and rail. Again, this is not helping the North.”

Tony Hallwood, the airport’s development director, said: “We look forward to receiving further information about this initiative.”

It came in a ‘Budget for Savers and Pensioners’, boasting radical reforms to tax rules on retirement pots, after fierce criticism of complex and confusing annuities.

Now retirees will be able to take out more of their savings in cash, rather than having money locked away in products attacked for their poor value.

Other measures for savers included allowing people to save more tax-free – up to £15,000 a year – in more generous ISAs. And a million new ‘pensioner bonds’ will allow the elderly to buy new products that pay higher interest than at the bank – four per cent for three-year bonds.

The Chancellor also announced:

  • another hike in the tax-free personal allowance – to £10,500 next year – and in the higher rate threshold, from £41,450 to £41,865 next month.
  • an extra £140m for repairs and maintenance to flood defences and £200m for potholes.
  • a halving of bingo duty to ten per cent – to stem a dramatic decline in bingo halls, down by three quarters over the last thirty years.
  • a 1p cut in beer duty, with duty on spirits and ordinary cider frozen.
  • tobacco duty to rise by two per cent above inflation – an annual hike to continue beyond the next general election.
  • a five-year cap on welfare spending, starting at £119bn in 2015 and rising with inflation, but excluding pensions and Job Seekers Allowance.

In setting the new welfare cap, the Chancellor hoped to set a trap for Labour, but the Opposition quickly announced it would back the move, in a vote next week.

Kris Hopkins, Conservative MP for Keighley, said: “This Budget was the product of a confident Chancellor presiding over an increasingly confident economy.”

And David Ward, Liberal Democrat MP for Bradford East, pointed to the rising tax threshold, saying: “This would not have happened without Lib Dems in Government, creating a stronger economy and a fairer society.”

Pubs And Bingo:

Beer duty has been cut by one pence, bringing the duty on a pint down by eight pence over this government’s term, and duty frozen on Scotch whisky and cider.

William Wagstaff has been landlord of the New Beehive Inn on Westgate for the past 25 years, and is the longest-standing licensee in Bradford.

“The budget seems supportive of our trade, so I’ll drink to that,” he said. “The industry is still suffering, so anything that offers a little help can only be a good thing. We are still losing pubs in an ever-decreasing circle, so I think today’s measures are an attempt to safeguard the industry before even more are lost. The cut on beer duty reflects the Government’s attitude to look after the pub trade, which has to be welcomed.”

The district’s bingo halls also received a timely boost with duty on bingo clubs falling from 20 per cent to ten per cent, exceeding the ‘Boost Bingo’ campaign call for a five per cent reduction.
The campaign, run by The Bingo Association, gathered more than 330,000 petition signatures from players across Britain, and was supported by Philip Davies, Conservative MP for Shipley.

Pensioners:

All tax restrictions on pensioners’ access to their pensions have been removed, ending the requirement to buy an annuity. People can now take a lump sum of up to £30,000 as cash and organise their own spending.

Pensioners who take this option could find themselves paying a higher rate of income tax, but could take out a ‘Pensioner Bond’, a new account for people aged 65 and over with an interest rate of about 2.8 per cent for a one-year bond, or four per cent for three years.

But Jean Walker, co-chairman of the Bradford & District Older People’s Alliance, said some pensioners don’t have enough savings to benefit from the new proposals.

“The new pensioner bonds are all well and good, but a lot of people are having to use their savings on basic living costs,” she said. “The cost of living has gone up tremendously in the last year and older people, especially those who own their own homes, also have maintenance costs to consider.

“The improved interest rates are welcome, but most people can’t leave the money in savings accounts to accrue that interest.

“It would be nice to use pensions as savings, but lots of people just can’t afford to do that. Some people even have to find money to support their own care, so these benefits won’t affect them.”

Families:

From Autumn 2015, tax-free childcare will cover 20 per cent of working families’ childcare costs up to a limit of £10,000 a year. This will help 490,000 children in working families in Yorkshire and the Humber, with 25 hours of childcare a week for a child under two saving an average of £940 a year.

Laura Edmonds, a single mum of two from Cullingworth, welcomed any help in relation to easing the burden of childcare costs.

“I really struggle with childcare costs. I work and do nights so my childcare bill is £1,800 a month. I think the cost of childcare itself needs lowering,” she said.

Ruth Weston, a mum-of-five from Bradford who also runs her own business, Aquabirths, says childcare is the biggest issue facing families.

She also believes it is the key to getting women back into the workplace, as long as it was made cost effective to prevent families working simply to fund childcare.

“I think childcare is the key to helping families work their way out of poverty,” she said. “It seems a nice budget, but I think they are shoving all the cuts on to the local authority and that really does affect families.”

Business:

Some of the biggest announcements for businesses included a doubling of the Annual Investment Allowance (AIA) for capital expenditure from £250,000 to £500,000, a capping of the Carbon Price Floor and other green levies to reduce energy bills, and an extension of the Apprenticeship Grant for Employers (AGE) scheme until 2015-16.

Bradford Chamber President, Paul Mackie, said: “Measures to help exports, to support investment, and spending on infrastructure – all these are welcomed and will help to support more economic growth, which is what we want to see in the short and long-term.

“Extending the Apprenticeships Grant for Employers was one of the key requests of the Chamber movement, so we’re obviously pleased with that one.

“It seems that the Chancellor has listened to businesses this time. Concerns on energy costs, export finance, and transport resilience have all seen some form of action.”

Willie Clark, managing director at the Shipley-based engineering and manufacturing company Partline Ltd, said: “My main issue is that there is still not enough in there that will help to support young people get jobs, such as funding for skills or training centres. This lack of investment will come back to haunt us at some point.”

Taxation:

233,000 people in Yorkshire and the Humber will be taken out of income tax altogether when the Personal Allowance rises to £10,000 in April, and another 25,000 will benefit when it rises again to £10,500 in 2015, as announced yesterday. Nearly two million people across the region will see an average real term gain of £61.

Liberal Democrat MP David Ward said 185,670 people across the Bradford district would benefit from the new measures, including around 40,390 from his Bradford East constituency.

“This tax cut is a real boost for working people in Bradford,” he said. “The ISA allowance increase to £15,000 will also help savers hit with low interest rates.”

From July 1, cash and shares ISAs, individual savings accounts, will be merged into a single ISA with an annual tax-free savings limit of £15,000.

Andy Caton, from Yorkshire Building Society, said: “Changing the rules on ISAs is tremendous news for savers.

“Introducing a larger tax-free allowance, and removing the distinction between cash and stocks and shares ISAs, incentivises the savings habit and massively widens the options for those who already put money away.”

Those saving to get on the property ladder were buoyed by the news that the government’s Help to Buy equity loan scheme will be extended to 2020.

 

click2find

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree