2009 budget

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The 2009 Budget was announced on the 22nd April 2009, but what we want to know is how exactly the Budget effects us and will it help repair the British Economy?

We have highlighted the main changes, good and bad, to show what is likely to effect us in our day to day living.

Budget 2009 Good News


£100 extra will be given to people over 80 and £50 extra will be given to people over 50. This will be given alongside their winter fuel payment.


The ISA limit will be increased to £10,200, £5100 of which can be cash savings. This will be available to people over 50 from 6th Oct 2009 and to everyone else from 6th April 2010.

House Purchases and Sales

Stamp Duty is to still only apply to properties over £175k until 31st December 2009.

A 600 Million fund is being created to assist in new homes being built. The idea behind this is that an additional 10,000 homes will be built in England over the next 2 years.

Motor Sales

A temporary scheme has is being put in place where when buying a new vehicle and scrapping a vehicle which is over 10 years old, the new vehicle purchase price will have a £2000 discount applied as an incentive.


People who are aged between 18 and 24 and have been unemployed for 12 months will be guaranteed a job, training or work replacement.

Also a further 54500 further education places will be made available for people aged 16 to 17.

Environmental Help

£1.4 Billion is being invested as extra support for the low carbon sector. This includes assistance to businesses, public buildings and homes. This aims to enable them to become more energy efficient and to save money on fuel bills.

Budget 2009 Bad News

Income Tax

People who earn over £150,000 per year are set to see an increased income tax rate of 50%, and the personal tax allowance for those who earn £100,000 or more is set to be reduced.


For people who earn £150,000 or more will have reduced tax relief on their pension contributions.


The Local Housing Allowance is being amended to match the rent that is paid. Currently an allowance is granted and if the rent paid is actually less than the allowance then people are allowed to keep the remaining monies. This will no longer be the case.

Alcohol and Tobacco

As we often see in Budgets alcohol duty will be increased from the 23rd April 2009. A 2% increase will be applied, this will in effect increase a pint of beer by 1p, a bottle of spirits by 13p and a bottle of wine by 4p.

Tobacco will be increased also by 2%.


Fuel Duty ie Petrol Tax is set to increase on the 1st Sept 2009 by 2p per ltr, then 1p per ltr per year from 2010 to 2013. Duty on Rebated Oils will also increase, with the same increases and on the same dates as Fuel Duty.

Some Vehicle Tax will also be increased as of the 1st May 2009.

Do we think the Government are doing enough?

The latest budgets intentions is to make the British people feel a little more at ease, and aims to reassure us that much is being done to repair the British Economy. The question is though, is what has been proposed enough and are people really going to benefit?
We can see that pensioners will be receiving a little extra bonus for the winter months and that ISA investment limits have been increased, however when interest rates are still low pensioners who rely on their savings are more than likely to still be worse off and due to this, is the increase ISA limit really beneficial?

Everyday living costs again look set to be on the increase with increases on Fuel, Alcohol, Road Tax and Tobacco. As we have seen previously when there is an increase on Fuel and Road Tax, there is a knock on effect in that food and goods all increase in cost as the suppliers are having to pay more to transport these goods. As for the increase on alcohol, this has the potential to stop more people visiting their local public houses, and as we know this is an industry which has been really effected with Pubs going out of business at a rate of knots. If we are not careful there could come a time where there will no longer be such a think as the old style local pub.

However, it does seem that the Government are stuck between a rock and a hard place as increases are necessary to try and repair the countries economy, yet to make increases, that means that tax payers will have to pay out more and they are the people who are being effected everyday by the fall in Britain's Economy. Leisure activities and luxuries have been cut back on in many ways, such as many families not being able to travel on holiday to Europe this year due the the pound being so weak, they may be able to afford the holiday itself but to make purchases whilst there is now extremely costly. We are certainly in difficult times, to which we really do not know when we will see an end, but there are some tips on how to Survive the Credit Crunch which you may find useful.

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Updated on 23rd April, 2009

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