Surprises from the Autumn Statement

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The Chancellor was met with jeers when stating the obvious in the opening of his Autumn Statement this afternoon - that "economic recovery is taking time."

Much of George Osborne's statement was predicted, but where they any surprises in this update on the state of the nation's balance sheet?%VIRTUAL-SkimlinksPromo%

1. Borrowing and deficit down
Forecasts that both borrowing and deficit would rise were dispelled when Mr Osborne confirmed that both have fallen considerably this year with further cuts predicted. The Chancellor admitted that while both rates were still far too high for comfort, Britain is heading in the right direction

The deficit - the gap between what the government spends and what it receives in tax revenue - is forecast to fall from 7.9% last year to 6.9% this year, then 6.1%, 5.2%, 4.2%, and 2.6%, reaching 1.6% in 2017-18.

Net borrowing is also forecast to fall, from £159billion to £108bn next year.

2. Growth forecasts slashed
Debts may be down, but so is growth and the latest OBR predictions contrast considerably to those made in the Chancellor's Budget statement in March. Growth is predicted to be -0.1% in 2012, down from 0.8% predicted in March.

OBR growth forecasts for next few years are: 1.2% in 2013, 2% in 2014, 2.3% 2015, 2.7% in 2016 and 2.8% in 2017.

While the Chancellor's major measures announced today - including a 1% cut in corporation tax and £5 billion investment in infrastructure - are aimed at boosting growth, pundits are calling for greater urgency.

"There were welcome measures but some of these are not due until 2014," said Stephen Robertson, director general of the British Retail Consortium. "Retail sales are flat. 2013 will be another tough year. Much more needs to be done to support the retail sector in its contribution to overall growth.

"The Chancellor's failure to offer immediate support for struggling high streets by announcing a business rates freeze is disappointing."

3. Fuel duty freeze
The planned fuel duty rise of 3p a litre for January was not postponed until the spring as predicted, but cancelled altogether. The Chancellor confirmed that fuel duty has not risen for two and half years.

"This is a welcome victory for motorists," says Gareth Kloet, head of car insurance at Confused.com.

"Drivers have enough to contend with this December as the EU gender ruling is expected to push insurance costs up for female drivers, so it will be a particular relief to women to hear that they don't have the double-whammy of a rise in petrol duty too."





4. Crackdown on tax havens
The Chancellor said that while the vast majority of people pay their taxes, there are still too many who illegally evade and this must be stopped. He announced an 2,500 increase in the number of tax inspectors going after evaders and avoiders, plus a new treaty signed with Switzerland from which Britain expects to receive £5 billion over the next six years from the undisclosed Swiss bank accounts of UK residents.

The Chancellor said that this is "the largest tax evasion settlement in British history." Further action includes the closure of millions of pounds of tax loopholes with immediate effect and a crackdown on the abusive use of partnerships.

5. Mixed message on pensions
Retirement planning faces confusion following a cut in tax relief on pension contributions, yet a boost for ISAs and an increase in the income drawdown rate for pensioners.

Today the Chancellor announced a cut in the lifetime allowance from £1.5 million to £1.25 million and a cut the annual allowance from £50,000 to £40,000, to come into effect from 2014-15. He said that this will reduce the cost of tax relief to the public purse by an extra £1 billion a year by 2016-17.

He admitted that the "measures will not be welcomed by all" but backed his move by stating that 98% of people currently approaching retirement have a pension pot worth less than £1.25 million, and 99% of pension savers make annual pension contributions of less than £40,000.

"The Chancellor delivered mixed news for the future of pensions," said Malcolm Small, director oat the Tax Incentivised Savings Association (TISA). "Cutting tax reliefs will be yet more evidence for a suspicious public that the Treasury views pension savings as a cash cow. That is another blow to public confidence at a time when we should be encouraging people to put money aside.

"By contrast, increasing the drawdown rate and expanding the scale and range of tax exemptions for ISAs are both welcome steps. What we need is a coherent strategy for retirement saving - rather than giving with one hand and taking with the other."

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10 of the biggest consumer rip-offs
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Surprises from the Autumn Statement

Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.

To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.

Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.

At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.
Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.

It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.

With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.

No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.

Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.
It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.

Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.

While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.
What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.

Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.

However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.
To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger 'economy' packs really are cheaper than the smaller versions.

Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.

However, you can cut the cost of train travel by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.
Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.

Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.

Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.
Before signing up, it is therefore essential to check that you will make use of enough of the benefits, and that you cannot get them for less elsewhere.

Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.

Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.
You can, however, avoid these charges by using a Saga Platinum or Nationwide Building Society credit card.

Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute from a mobile phone.

And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.
Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the saynoto0870.com.
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