Budget 2012 round-up: Pensioners the big losers

But under-65s who pay basic rate tax will, on average, be £220 a year better off from that date, while more people than had been planned will be eligible for child benefit.

Meanwhile, the rich will pay less income tax from next year but face an immediate hike in the cost of £2 million+ properties.

Petrol, booze and cigarette prices will also rise, as they always tend to after a budget.

Below, we round up what Chancellor George Osborne's Budget 2012 means for you.

Pensioner tax blow

Pensioners received a £3.3 billion broadside as they found out they will eventually lose the higher personal allowance they enjoy in comparison to the rest of the population.

As their personal allowances (the amount of income they pay no tax on) will be frozen until they are aligned with those for under 65s, assuming their income rises, they will therefore pay more tax over time.

HM Revenue & Customs admits that by April 2014, 4.4 million people will be worse off in real terms with an average loss of £83 per year.

Within that total, 360,000 65-year-olds will lose an average £285 while 230,000 people will be brought into income tax that wouldn't have paid it otherwise.

The Treasury's full breakdown of figures reveals the change is estimated to raise £3.3 billion in tax over its first four years, money which otherwise would have been in pensioners' pockets.

For full info, see the Pension Blow MSE News story.

The Chancellor also announced that next month the basic state pension for a single person will rise by £5.30 a week to £107.45, and also confirmed plans to press ahead with a single payout, combining the basic and second state pensions (see State Pension Plans news).

Tax cuts for low and middle earners

Chancellor George Osborne revealed the personal tax allowance will rise for the under 65s.

Anyone aged up to 64 currently pays no tax on the first £7,475 they earn, rising to £8,150 as planned in April. This threshold will now rise again, to £9,205, in April 2013.

Osborne says low and middle income earners will be £220 better off per year when this kicks in. Higher rate payers won't benefit to the same extent as more will fall into that 40% category. The Government says higher rate payers will only see a quarter of the gain.

For full info, see the Tax Allowance Rise MSE News story.

Child benefit cut partially reversed

Under previous plans, parents earning more than £42,475 a year each – the 40% tax rate threshold – were set to lose their child benefit payments from January 2013.

A mother and father earning £40,000 each would have kept their payments, but a single parent on £43,000 would have lost out under the old proposals.

The new plans allow a family to continue getting the full allowance so long as neither parent earns more than £50,000 a year.

If a parent earns over that threshold, they will lose 1% of the benefit for every extra £100 they earn. This will be taken as an income tax rise.

Households where at least one parent earns over £60,000 a year will not see any gain from child benefit.

For full info, see the Child Benefit changes MSE News story.

Tax on petrol to rise

Drivers had their hopes of avoiding another petrol pump increase later this year dashed.

Motorists had wanted Osborne to defer August's proposed fuel duty rise in today's Budget. But the Government said it would press ahead with the plans, which will see fuel duty go up 3.02p per litre.

For full info, see the Fuel Duty Rise MSE News story.

Tax cuts for the rich

Anyone who earns over £150,000 a year will pay less tax from next year. At present, those in that top tax bracket pay 50% on earnings above that threshold.

That rate will drop to 45% in April 2013

For full info, see the 50% tax cut MSE News story.

Mansion tax hike

Property buyers who purchase homes worth over £2 million will have to pay a significantly higher rate of stamp duty.

The new tax rate for property buyers will become 7% later today. The rate for all homes worth over £1 million was 5%, and that still stands for homes between £1 million and £2 million.

The rate for £2 million+ properties held in a company will be 15%.

For full info, see the Stamp Duty Rise MSE News story.

Booze prices up and cigs soar

Smokers will be hit by higher prices as the Chancellor announced increases in tobacco duty in today's Budget. Meanwhile, the price of alcohol will rise next week.

From 6pm tonight the tax on all tobacco products will rise by 5% above the retail prices index (RPI) measure of inflation.

This means smokers will pay, on average, 37p more on a packet of 20 cigarettes.

The cost of booze will increase by 5% from 26 March.

The British Beer and Pub Association says the average new price of a pint of lager will be £3.17.

For full info, see the Sin Taxes Up MSE News story.