This month`s emergency Budget will be met with mixed feelings by people in debt. The Budget - which aims to tackle the huge public debt facing the nation - includes a few changes that could help struggling borrowers, but others that could make things more difficult.
Here is a quick guide to some of the announcements made in this year`s Budget - which could help or hinder your ability to tackle your debts.
Personal income tax allowance - the salary threshold at which income tax is charged - is to be raised by £1,000 in April 2011, up to £7,475. This means tax will only be charged on annual earnings above this amount.
The change is worth £170 a year to a basic-rate taxpayer. According to the BBC, 880,000 of the lowest-paid members of society could be exempt from income tax altogether once this change has been made.
Council tax in England could be frozen for a year as of next April.
The landline tax proposed by the Labour government is to be scrapped. This would have cost landline users 50p a month.
Tax on fuel, cigarettes and alcohol will not be increased. The plan to increase duty on cider by 10% will also be scrapped.
Child Tax Credit will be increased for low-income families. The amount per child will increase by £150 above the rate of inflation next year.
Child benefit will be frozen for the next three years.
Housing benefit will be subject to new maximum limits - £400 a week for homes with more than three bedrooms, £340 for a three-bedroom property, £290 for a two-bedroom property and £250 a week for a one-bedroom flat.
Unemployed people will have their housing benefit cut by 10% if they have been claiming Jobseeker`s Allowance for more than 12 months as of April 2013.
The Health in pregnancy grant will be abolished from April next year. Meanwhile, the Sure Start maternity grant will be restricted to the first child only.
This will depend on your individual circumstances. There are some things that will help to reduce costs for certain people, while some costs will increase - and others will simply stay the same.
Either way, you should take a good look at these announcements and see which apply to you. For example, if you claim Housing Benefit, you might be concerned about cuts to your allowance affecting your ability to repay your debts.
Most importantly, if you do think you`re going to struggle with your debts - or if you`re already struggling - you should contact a debt adviser as soon as possible to discuss your options. They can help you find the best way of tackling your debts.
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Tags: budget, UK, UK budget, emergency budget, child, child benefit, housing benefit, health in pregnancy grant, sure start maternity grant, child tax credit, tax on fuel, cigarettes, alcohol
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