Budget 2015: “Saving revolution” as Osborne pledges first-time buyer Isa
George Osborne unveiled a Budget aimed at helping savers, first time buyers and pensioners today, with measures including a "Help to Buy Isa".
Under the new rules, the government will contribute £50 for each £200 saved by first-time buyers. Savers who put away £12,000 could stand to make as much as £3,000
Just before he finished his speech, the chancellor also announced a new Personal Savings Allowance, meaning savers will not pay tax on the first £1,000 of interest they earn, which he said will "take 95 per cent of taxpayers out of savings tax altogether.
In a speech largely seen as the chancellor's final chance to entice voters, Osborne announced a "revolutionary" simplification of tax returns, scrapping the annual tax return in favour of a digital version.
More on this story: Here's everything you need to know about the Help to Buy Isa
He also scrapped class 2 national insurance contributions for the self-employed, hiked the personal tax allowance to £11,000 next year, and promised the higher-rate threshold will rise "above inflation" by 2017-18 – a tax cut for 27m people, he said.
The Budget also involved measures for drinkers, including:
- Beer duty cut
- Cider duty cut
- Scotch duty cut
- Wine duty frozen
"Walking tall again"
Forecasts from the Office for Budget Responsibility suggested the chancellor's austerity strategy has worked: UK borrowing will fall to £90.2bn in 2015, £1bn than expected, he said, falling again to £75.3bn in 2015-16, followed by £39.4bn in 2016-17, and £12.8bn in 20117-18 – "£5bn less than we forecast three months ago".
As part of his deficit reduction strategy, Osborne announced plans to sell of £13bn of "bad" mortgage assets inherited when the government bailed out Northern Rock and Bradford & Bingley. The government will also sell another £9bn of Lloyds shares, worth about six per cent of the bank.
Osborne said the forecast, which came from the independent Office for Budget Responsibility, took into account "weaker world growth, weaker world trade and weaker European growth" – although the figures were revised up by 0.1 percentage points.
The OBR also revised down its forecast for inflation to 0.2 per cent – although he held the Bank of England's inflation target at two per cent.
"Britain is walking tall again," said Osborne. "Five years ago I said we would turn Britain around. I will not waver from that task, we choose the future".