Last week saw chancellor Alistair Darling make the headlines after unveiling his Budget in the House of Commons. With the general election looming, the showpiece came at a politically sensitive time, meaning Mr Darling was tasked with making the Budget appealing to voters without leaving himself open to accusations of recklessness.
However, while the media focus in the aftermath of the chancellor's statement centred around the government's plans to reduce the debt burden racked up during the recession, there were also a number of measures announced which will have a more immediate impact on consumer finances.
Chief among these were moves to increase the annual investment allowances for individual savings accounts (ISAs), promote greater financial inclusion and ensure more widespread broadband coverage in the UK.
How does the Budget impact on ISAs?
As previously announced, the ISA limit for all savers will be increased to £10,200 from April 6th this year, allowing consumers to put more money into tax-free, high-interest accounts. Of this, up to £5,100 can be saved in a cash ISA. However, further to Mr Darling's latest Budget, the limit will continue to increase in line with inflation. Therefore, should inflation settle at the government's target of 2% for the next 12 months, consumers would be able to invest up to £10,400 in the 2010-11 tax year.
How does the Budget impact on broadband?
Mr Darling used the budget to reaffirm the government's position on broadband. This encompasses a commitment to superfast broadband for 90% of homes by 2017. He also confirmed that this would be paid for with a £6 annual tax on landline phones.
How does the Budget impact on bank accounts?
Another area in which the Budget will have an effect is bank account provision. With a number of people excluded from taking out even the most elementary of financial products, Mr Darling has moved to ensure banks are legally required to set up a basic bank account for anyone who asks. According to the Treasury, this could help more than 1 million adults.
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