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Britain gets richer… how can you share in it?

As with every budget the Chancellor of the day faces some awkward questions over the arithmetic but for taxpayers there is much to welcome.

In a confident speech George Osborne remained resolutely on message from the opening remarks in which he stated this was a Budget for families, pensioners, for the self-employed, savers and first-time buyers.

There is no doubt there was more in this Budget for those who want to take control of their own family’s finances than for many years. With savings, private pensions, tax and the property market the Chancellor offered help to those who want to provide for themselves.

Take the Help to Buy ISA announced in his speech. The Government will add £50 to every £200 saved by an aspirant first-time buyer for a house deposit up to £15,000 the average 10 per cent deposit in the UK. It is, said Mr Osborne, the equivalent of a 25% tax refund.  This is extremely good news and could be a very helpful addition to those saving and looking to their families to help with a deposit with our Family Mortgage, which has been generating a lot of interest since we launched it in July last year. Budget winner Image

Coupled with an extension of ISA limits to £15,240 and a further decluttering of the rules to allow savers to withdraw and deposit money in their ISAS in a single tax year without losing tax advantages, this cannot be anything other than a boost for savings. Of course, we will have to wait to see exactly how this will operate but with interest rates at such low levels, the flexibility this will offer savers will be mightily welcomed. It shows the sort of creative thinking that we have put into our own Windfall Bond and our tracker ISA products. Savers with the Family Building Society can rest assured that we will be thinking hard about the implications of these changes for products that we can offer.

Further liberalisation of pension rules surrounding annuities will allow, according the Chancellor, an additional 6m people more access to more of their pensions savings. Again, this is to be welcomed, as long as pensioners are really careful to understand all the tax implications before they book the Lamborghini test-drives.

Perhaps the best news for savers is the abolition of tax on the first £1000 of income from cash savings (£500 for a higher-rate tax payer). Mr Osborne said 95 per cent of savers will no longer pay any tax at all.

This is a great relief for hard-pressed savers who have lost, according to research from Hargreaves Lansdown, as much as £130bn in interest payments since 2008. The firm compared actual interest rates, currently averaging 0.78 per cent, with average interest rates in 2008, 3.1 per cent. If rates had remained at that level since 2008 each household would be, again on average, £5000 better off in interest received.

The Budget is one of the great political events of each Parliamentary year and perhaps never more so than when an election looms. For savers, this one looks as though it will, at last, deliver for them. It’s too soon to predict a scorching summer, but at least the sun does seem to be about to come out from behind the clouds.

By Steve McDowell

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