George Osborne has unveiled measures to boost the income of pensioners and savers hit by low interest rates.
In his Budget speech, he made tax-free Isas more “generous” and unveiled a million new “pensioner bonds”.
The amount people earn before tax will also go up by £500 to £10,500.
The chancellor also froze petrol duty, cut bingo tax from 20% to 10%, froze Scotch whisky and cider duty and cut a further 1p from a pint of beer - but put the price of cigarettes up.
Labour leader Ed Miliband said he failed to mention in his speech that “the working people of Britain are worse off under the Tories, living standards down month after month, year after year”.
In a surprise announcement at the end of his 55 minute-long Budget speech, Mr Osborne said cash shares and Isas were to be merged into a single New Isa with an annual tax-free savings limit of £15,000 from 1 July. The limit for Junior Isas will be raised to £4,000.
He also outlined a new Pensioner Bond paying market leading rates to be available from January to all people over 65, with interest rates of 2.8% for one-year bonds and 4% for three-year bonds.
The cap on the amount of Premium Bonds a person can own will rise from £30,000 to £40,000 in June and £50,000 in 2015. The number of £1m winners will also be doubled.
A sensible budget to support North East growth - that how North East Chamber of Commerce Policy Director Ross Smith viewed the announcement.
He said: “The Chancellor promised no quick fixes and he was right to do so. With the North East recovery accelerating, this was not a time for gimmicks that might cause instability.
“What we got was a series of measures that match NECC members’ priorities. Greater support for exporters and energy intensive industries play to the region’s strengths, while measures on skills and capital investment are also welcome.
“Backing for new long haul flights from regional airports could meet another of our top transport priorities if the scope is right.
“This was a sensible budget, and the conditions within which North East businesses can continue their strong contribution to UK growth have been strengthened by these announcements.”
Measures announced in Mr Osborne’s fifth Budget speech include:
:: Personal tax allowance to be raised to £10,500 next year; £800 average savings
:: Higher rate threshold for 40p income tax to rise from £41,450 to £41,865 next month and then by further 1% to £42,285 next year
:: Transferable tax allowance for married couples to rise to £1,050
:: 15% stamp duty on homes worth more than £500,000 bought through companies
:: Inheritance tax waived for emergency services personnel who “give their lives protecting us”
:: VAT waived on fuel for air ambulances and inshore rescue boats
:: Fuel duty rise planned for September cancelled
PENSIONS AND SAVINGS
:: All tax restrictions on pensioners’ access to pension pots removed and tax on cash removed on retirement cut from 55% to 20%
:: Reform of taxation of defined contribution pensions to help 13 million people from March 27
::: Abolition of 10p starting rate of tax on income from savings
:: GDP growth forecast to be 2.7% this year, then 2.3%, 2.6%, 2.6% and 2.5% in following years - making UK economy £16 billion bigger than predicted.
:: Deficit revised down to 6.6% this year, and forecast to fall in following years before going into surplus of 0.2% in 2018/19
:: Borrowing expected to be £108 billion this year - £12 billion less than forecast
:: Debt revised down to 74.5% of GDP this year; then predicted to peak at 78.7% in 2015/16 and fall to 74.2% by 2018
:: OBR forecasts 1.5 million more jobs over the next five years and earnings to grow faster than inflation
:: Welfare cap set at £119 billion for 2015/16, rising to £127 billion by 2018/19, only state pension and cyclical unemployment benefits excluded
:: £7 billion package to cut energy bills includes £18 per ton cap on carbon price support, saving medium-sized manufacturers £50,000 and families £15 a year
:: Compensation scheme for energy intensive industries extended four years to 2019/20; £1 billion to protect manufacturers from cost of green levies
:: Tobacco duty to rise by 2% above inflation
:: Alcohol duty escalator scrapped
:: Duty on spirits and ordinary cider frozen. Beer duty cut by 1p a pint
:: Duty on fixed-odds betting terminals increased to 25%
:: Bingo duty halved to 10%.
:: 20% tax relief for theatre productions
:: £270 million guarantee approved for the Mersey Gateway bridge.
:: Support to build 200,000 homes.
:: Additional £140 million made available for repairs and maintenance to flood defences
:: Business rate discounts and enhanced capital allowances in enterprise zones extended for three more years
:: Research and development tax credit for loss-making small businesses raised from 11% to 14.5%
:: Annual investment allowance doubled to £500,000 and extended to the end of 2015
Don't miss tomorrow's Journal for our 16-page Budget special supplement.