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One key point amongst the Chancellor’s announcements was that there was no recession forecast by the Office for Budget Responsibility, although the economic growth forecasts have been downgraded for the fourth time since the election of the coalition government.
Those affected by the measures announced included pensioners, motorists, public sector workers and public transport commuters. Here’s who’s affected and how:
An increase in the state pension age, from 66 to 67, due to take effect in 2026, is forecast to save the economy £59 billion.
Weekly state pension payments will rise by £5.30 per week, from April 2012, with the full couple rate rising by £8.50 per week. And the pension credit will be increased to £142.70 per week for single pensioners, with couples receiving £217.90.
A deal has also been signed between the government and two groups of UK pension funds to give £20 billion in investment for infrastructure projects.
The 3p rise in fuel duty which was planned for January has now been postponed to August.
Public Sector Workers
It was announced that public sector pay would only be rising by an average 1% over the two years from the end of the current pay freeze in 2012.
The possibility of variable pay rates will also be explored, with the Chancellor intending to see whether ‘public sector pay can be made more responsive to local markets’.
And the estimated 400,000 public sector jobs which the Office for Budget Responsibility forecast to be lost between 2011 and 2016 is now believed to have almost doubled in the same timescale with 710,000 expected to go by 2017.
Mortgage indemnities and a revision of the ‘right to buy’ policy introduced by the last Conservative government have been introduced to make housing more affordable and encourage those who are struggling to buy.
The first time buyers’ stamp duty exemption however, will expire on 24 March 2012, due to its apparent ineffectiveness.
Inflationary revision and consequent ‘uprating’ of the child element in the Child Tax Credits will see it rise by £135 per year.
Fifteen hours of free nursery care are to be given to another 130,000 two-year-olds, mainly those from disadvantaged backgrounds.
Those on benefits and receiving tax credits
From April 2012, most working age and disability benefits will be uprated according to the measure of inflation by the Consumer Prices Index, although this will not apply to the couple and single parent elements of the Working Tax Credits.
Offering 160,000 monetary wage incentives in order for private sector companies to increase their employment of young people, the Youth Contract is due to be introduced by the government and will be offering a total of £940 million in a bid to encourage more young people into work.
£50 million will also fund a programme aimed at helping disadvantaged 16-17-year-olds, and offering additional support in the Jobcentres for 18-24-year-olds.