Last year, Chancellor George Osborne dubbed his 2013 Budget as one that represented an ‘aspiration nation’.
The UK was introduced to the government’s Help To Buy scheme, designed to stimulate the housing market, while it was announced that Universal Credit would replace a host of other welfare benefits.
Consumers were also treated to a personal allowance rise, a drop in beer duty and a freeze in fuel duty.
With this year’s Budget now on the horizon, we take a closer look at the decisions made in 2013 and the impact they had on your finances.
Go further: Budget 2014 with Which? – get the latest news and advice in our Budget hub
Help To Buy
Budget 2013 – Help to Buy was a two-part strategy introduced to help make mortgages more accessible for financially-stretched homebuyers.
The first section, which launched in April, involved the government issuing £3.5 billion worth of equity loans worth up to 20% of the value of new-build properties.
The second phase of the scheme, in which the government would provide £130 million worth of mortgage guarantees, was also scheduled to begin on January 1.
What’s happened? – House prices continued to rise throughout the summer, prompting David Cameron to launch the second phase of the scheme three months early.
Although house prices continue to grow, a growing list of lenders are now offering customers the opportunity to take out 95% LTV Help to Buy mortgages.
Whilst some sceptics maintain that the scheme will cause a housing bubble, Help To Buy equity loans helped almost 13,000 buyers secure a new home in the first nine months of the scheme being launched.
Go further: Help to Buy explained – learn more about the government’s scheme
Budget 2013: Universal Credit involved a number of means-tested welfare benefits being replaced by one monthly payment. It was announced that it would be rolled out from October 2013 with the aim of it completely replacing the old system by 2017.
The government predicted that 3.1 million households would be entitled to more benefits as a result of Universal Credit and that the system would be quicker, more accurate and easier for recipients to understand.
What’s happened? – Although we are still in the initial stages of this scheme, its introduction has been far from smooth.
The IT systems behind it have been plagued with errors and many people have expressed concerns that recipients will be unable to budget for monthly payments.
Go further: Tax credits – find out more about the tax breaks offered
Income tax and duties
Budget 2013 – Britain’s lowest earners, already buoyed by the planned personal allowance rise to £9,440 in 2013/14, were boosted further by the announcement of a rise to £10,000 in 2014/15.
A planned increase on fuel duty was scrapped, whilst the scheduled 3p increase on the cost of a pint was replaced with a 1p cut.
What’s happened – In spite of these changes, the cost of living remains a key concern for millions of British residents.
Inflation has continued to outpace food prices, leaving many families struggling to make ends meet. Campaigners have called for the Chancellor to address the rising cost of living again in this year’s Budget.
Go further: Tax rates, allowances and amounts – get to grips with how much tax you pay.