Budget 2013: What it means for families
Nothing is going to make life easy for families at the moment. However, George Osborne's Budget offered a few rays of sunlight - for those he called 'hard working families'.
He promised a lower income tax bill, help with childcare, a huge boost for homebuyers and help with some every-day costs. So will it make a big difference?
Income taxFor many families the major difference will be as a result of the raising of the personal tax allowance - which is the amount of money you are allowed to earn before you have to start paying tax.
This is due to go up in a couple of weeks to £9,440, and was then due to increase again to £10,000 at some point before 2015. Osborne announced this would rise a full year earlier than planned, in April next year.
He said this would put an extra £700 in the pocket of a typical family every year - and would lift 3 million people out of income tax entirely. Mark Pearson, founder of MyVoucherCodes.co.uk, says this is: "great news for those struggling to make ends meet. Having lived in less-than privileged circumstances as a child, I know just how much even the smallest increase in personal allowance helps. Mike Freer MP mentioned on Twitter that the change would mean those on minimum wage will see a tax cut of 50%."
HousingThe big bonus of the Budget was news of a new initiative to help people who are trying to get onto the property ladder - and those families who have outgrown their home and are struggling to trade up. The scheme will be called Help to Buy - and Osborne said it constituted a 'dramatic intervention' to help would-be home-buyers.
The first part is £3.5 billion for shared equity loans for people buying new-builds. Anyone who puts down a 5% deposit can get a loan from the government for 20% of the value of the property - which is interest-free for the first five years and repayable when the property is sold. There is no cap on income on those who qualify, although the home cannot be worth more than £600,000.
The second is for people who want to buy new or old properties, who are struggling to raise a deposit. It's a new mortgage guarantee. This will use the government's balance sheet to guarantee loans for those who pass the credit tests, but who have small deposits. The idea is to encourage lenders to lend to those who cannot save large deposits. Osborne said it will free up £130 billion more in mortgage lending.
The commentators are on the fence about whether any of this will work. Jeremy Trent, tax partner, HW Fisher & Company chartered accountants said that these initiatives have a habit of fizzling out - so he's going to wait and see.
ChildcareFor those with children, a major Budget benefit had already been announced by David Cameron and Nick Clegg. This is a new tax-free childcare scheme, to replace the current vouchers scheme.
It will be worth up to £1,200 for each child under 12 and it will be phased in from Autumn 2015 (at which point the under-fives will come into the scheme). It will apply to those working parents where each earns less than £150,000, and where they are not in receipt of any tax credits.
In addition there will be an increase in childcare support for low income families through the new Universal Benefit scheme
Care costsSomething else trailed by Osborne, the costs of care will be capped, so that no-one will ever have to pay more than £72,000 for care in their old age. This was down from £75,000 previously announced in the Houses of Parliament.
However, he also announced a massive change to the means test, which establishes the assets someone is allowed to hold before they qualify for help from the outset. This has been raised to £118,000.
Child Trust FundsBuried away in the small print of this Budget is good news for parents whose children qualified for a Child Trust Fund. They have been increasingly confined to accounts offering little in the way of interest, and increasing fees. Now the government has said it will consult on allowing these to be switched into Junior ISAs.
Danny Cox, Head of Financial Planning, at Hargreaves Lansdown points out: "Common sense has broken out at last. Child trust funds have been in terminal decline since 2011, seeing millions trapped in expensive products or suffering lower interest rates than their Junior ISA counterparts. This consultation will pave the way for a significant improvement in choice and outcomes for over 6 million children and ultimately lead to a full merger"
Jam tomorrowIt's worth pointing out that at this stage every single one of these new schemes will not be introduced immediately, so families will not wake up tomorrow better-off. In many cases it will take a couple of years to come to fruition (spookily in time for the general election).
However, there some small changes which will offer an immediate improvement:
Fuel DutyOsborne scrapped the fuel duty hike due in September 2013. He announced that his repeated scrapping of this duty has saved 13p a litre in the last two years - saving the average Ford Focus owner £7 on every tank of petrol.
Miranda Schunke, spokesperson for Green Flag, said: "While the cost of motoring is a constant concern, it will be a relief to millions of motorists that there is some respite against the escalating financial burden of owning and running a car."
Alcohol and TobaccoThese duties have been on an escalator of inflation plus at least 2%. For most alcohol and tobacco, this will continue to be the case this time round.
However, beer has earned a reprieve. It has been taken off the escalator, and in fact duty has been cut by 1p. Osborne says this is a move designed to help Britain's struggling pubs. It's a nice bonus for Britain's struggling families too. Pearson added: "I'm a huge fan of the fact we can go and have a cheaper beer on George!"
Not enoughHowever, while some are pleased with the changes, others argue that more needs to be done. Clare Francis, editor-in-chief at MoneySupermarket, said:"George Osborne has attempted to give something back. This may, however, be little comfort to UK households who are facing unprecedented pressures on their wallets."
"Giving with one hand may be a positive, but taking away with the other through other tax increases and benefit cuts means that people are no better off. In fact, the cumulative effect of this and previous budget changes, combined with wage stagnation and rising living costs means millions are worse off and an increasing number of families are on the breadline, struggling to make ends meet every month."
"More needs to be done to help families - the Government needs work harder to tackle rising everyday costs, such as heating, food and fuel."