Budget 2013: Five biggest surprises


Waitress carrying beerBudget 2013: What it means for you

When George Osborne stood up to make his Budget 2013 speech this morning, few people were expecting him to admit that the economy is now expected to grow by just 0.6% this year, half the 1.2% he predicted at the end of last year.

However, most people were also surprised to hear that the price of a pint of beer would be coming down by 1p.

Here are five of the biggest surprises from this year's Budget.

Cheaper beer
Over the last few years, duty on alcohol of all kinds has gone up automatically by 2% above the rate of inflation, in accordance with a so-called "alcohol duty escalator" introduced by the last Government.

However, rather than going up, duty on beer is to be cut by 1% later this month, scraping 1p off the price of a pint of beer in many parts of the country. The annual above-inflation rise in duty on beer is also to be scrapped.

The Government says that its decision has been prompted by falling beer sales and pub closures.

However, wine drinkers and cocktail fans will still have to pay more for their favourite tipples as all other alcohol duties are to rise by 2% above inflation as expected.

Lower economic growth
The economy is now expected to grow by just 0.6% this year, not 1.2% as predicted by the Government last year.

That's an unexpected blow for many Britons, who were hoping that the UK economy was finally looking up.

The figures for the years to come look a bit more positive, though. Osborne said that growth would hit 1.8% in 2014, 2.3% in 2015 and 2.7% in 2016 and insisted that the UK will avoid a "triple dip" recession despite slower economic growth this year.

Equitable Life compensation
While many Equitable Life policyholders are covered by a £1.5 billion redress scheme, those who bought their Equitable Life with-Profits annuity before 1 September 1992 have had little hope of compensation - until now.

That's because the government has promised ex-gratia payments of £5,000 for people in this group, plus another £5,000 to those in receipt of pension credit.

Osborne said: "We're not doing this because we're legally obliged to; we're doing it because quite simply it's the right thing to do."

Help for first time buyers
First time buyers, and anyone else struggling to buy a property, are to get a boost thanks to a new "Help to Buy" scheme, it was announced today.

An extension of the FirstBuy scheme aimed exclusively at first time buyers, it will be available to anyone buying a newly built home and will put up £3.5 billion in shared equity loans that can make up 20% of the purchase price.

Buyers will need a 5% deposit to qualify, but will now be able to buy homes worth up to £600,000 and will pay no interest on the Government loan for the first five years.

A "Mortgage Guarantee" scheme, which will help those who can't afford a big deposit, was also introduced.

£10,000 income tax threshold
The personal income tax allowance, or in other words the amount you can earn tax free before basic-rate 20% income tax kicks in, will be raised to £10,000 in April 2014, Osborne also announced today.

The fact that this is coming in is no great surprise. The threshold is currently £8,105, rising to £9,440 on April 6, and it was well known that the Government wanted to move it towards the £10,000 figure.

What is a surprise to many, however, is the fact that it is coming in next year and not a few years down the line as expected.

The Government claims that 3 million workers will pay no income tax at all from April 2014 as a result of this change.

Budget 2013: Winners and Losers

Budget 2013: Winners and Losers