Budget delivers real help for personal finances
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Issued Date: 23 Apr 2009
Savers, pensioners, homeowners and people struggling with debt
are to benefit from Budget measures to help people take control of
The Government is delivering a range of measures to provide
real help to tackle the pressures people are facing as a result of the
global economic downturn.
Welcoming the Budget boost to personal finances, Consumer
Affairs Minister Gareth Thomas said:
"We understand that money is tight for a lot of people at this
time. This Budget will help put money back in people's pockets, help
them to take control of their finances and, for those in difficulty,
get back on their feet again.
"We are helping people to get their foot on the property
ladder and meet their mortgage payments, helping pensioners and people
who rely on savings income, and putting real help in place for people
struggling with debts and on low incomes."
Minister for Pensions and the Ageing Society Rt Hon Rosie
Winterton MP said:
"It is important that we continue to support the poorest
pensioners through the economic downturn. The changes we have made to
Pension Credit will benefit half a million pensioners by ensuring that
any savings up to £10,000 will not affect their benefit entitlement."
Ian Pearson MP, Economic Secretary to the Treasury said:
"The Government wants to help all savers get the best possible
income from their savings by shopping around to secure the best
"To help with this the Financial Services Authority's Money
Made Clear service offers comparative tables of savings accounts and
has recently introduced a telephone helpline where people can get free
and impartial guidance on all aspects of personal finance."
* Tax-free ISAs - on the tenth anniversary of their
introduction, the annual tax-free savings limit will be increased from
£7,200 to £10,200 for over-50s this year, including half in cash, and
available to other savers from next year.
* In response to the potential impact of falling interest
rates on pensioners with savings the capital threshold in Pension
Credit will be increased from £6,000 to £10,000. The £10,000 limit will
also be implemented for pensioners entitled to Housing and Council Tax
* Social Fund - an additional £260million in total over two
years to meet demand for interest free loans for people in times of
financial difficulty, available through Jobcentre Plus.
* Growth Fund - a further £18.75m to help people on low
incomes obtain affordable credit and banking services through credit
unions and other community-based institutions. This will help to
prevent people sinking into a spiral of debt and being driven into the
hands of loan sharks.
* Car scrappage - the scheme will be introduced next month
enabling people to get £2,000 towards a new, less polluting car or van
under 3.5 tonnes.
* White Paper on consumer rights - this will set out proposals
* provide further help to people in difficulty with their
* strengthen the UK's credit regime; promote responsible
lending and borrowing;
* raise standards in debt collection;
* and set a longer-term direction for the sector and its
regulation that will deliver continuing access to affordable credit,
enhanced consumer protection and financial stability.
* State pensions - the increase in Winter Fuel Payments
announced in Budget 2008 will continue next year so that households
with someone over 60 will receive £250 and over-80s households £400 in
winter 2009-10. The State Pension is guaranteed to increase by at least
2.5 per cent next year.
* Mortgage Rescue Scheme - the scheme, which helps vulnerable
households facing repossession, will be expanded from May 1 to also
cover those in negative equity as a result of a fall in house prices.
* Repossessions' Prevention Fund - a new fund which will
provide small loans to homeowners or tenants facing repossession,
administered by Local Authorities.
* Stamp Duty - the holiday on stamp duty on purchases of
properties under £175,000 to help first-time buyers is to be extended
to the end of the year.
* £400 million to unblock stalled private sector house
building. The new funding will help restart stalled construction sites
by creating new partnerships with the private sector. This will help to
deliver 9,000 additional homes, all of which will start on site in
2009-10. This will include up to 5,000 homes to help first time buyers,
including the option to rent now and buy later, and up to 1,000 social
The housing measures follow this week's announcement of
support for homeowners to stay in their home through the Homeowners
Mortgage Support (HMS) initiative. HMS will enable eligible borrowers
who suffer a temporary loss of income to cut their mortgage interest
payments for up to two years to help them get back on track with their
1. Since 2006 more than 145,000 Growth Fund loans have been
made totalling in excess of £63 million. These are loans to people on
low incomes who might otherwise have turned to loan sharks or high cost
doorstep lenders to meet their borrowing needs.
2. The Social Fund is administered by Jobcentre Plus. The
additional funding amounts to £120m in 2009-10 and £140million in 2010
3. The Repossessions Prevention Fund will be administered by
Local Authorities. These loans could be used to pay off mortgage
arrears or secured charges where high interest rates are causing them
to be unaffordable.
4. The Mortgage Rescue Scheme was announced on 2 September
2008. It has been available across England since 16 January 2009
following successful fast tracking by around 80 local authorities in
5. Homeowners Mortgage Support - lenders covering more than 80
per cent of the mortgage market will now be providing enhanced support
to homeowners at risk of repossession. Lenders offering HMS will have
the security of a Govt guarantee if the borrower defaults. At the same
time four other high street lenders have confirmed they will offer
comparable arrangements to HMS to their customers while opting not to
take up the Government guarantee. For more information on HMS go to http://www.direct.gov.uk/hms
6. Earlier this month, Government has also launched
Moneymadeclear pilots in the North East and North West to provide
in-depth support and guidance on a range of money matters, supporting
people with their day to day money questions and worries and equipping
them with the ability to manage their finances better now and for the
future. See http://www.moneymadeclear.fsa.gov.uk
for further information
7. The Financial Services Authority's Money Made Clear website
can be found at: http://www.moneymadeclear.fsa.gov.uk
8. The Financial Services Authority's Money Made Clear
telephone helpline number is: 0300 500 5000
9. The capital threshold in Pension Credit will be increased
from £6,000 to £10,000 . The £10,000 limit will also be implemented for
pensioners entitled to Housing and Council Tax Benefit. The average
gain for eligible pensioners will be around £4 a week, and those on the
lowest incomes could gain up to £8 a week. The change to the capital
threshold will be introduced from November 2009.
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Article Published/Sorted/Amended on Scopulus 2009-05-12 13:25:09 in Tax Articles