Budget 2015: A quick guide on what to expect

Budget 2015: A quick guide on what to expect. Credit: PA Wire

The Budget isn't just about public finances - it’s about our personal finances too.

So, just how personal will it be for you?

Here's my quickie guide to what we can expect.

Tax:

There is something about the Chancellor that leads me to suspect he may change tax thresholds.

The thing about him that makes me suspect this is - he is a politician.

On the eve an election, he will be wanting headlines.

A rise in the main tax threshold to £11,000 is a nice round headline figure.

That would mean a £200 tax saving for those earning above the threshold.Another bold headline would be an increase in the threshold where 40% tax kicks in - perhaps to as high as £50,000.

This could be styled as a boost to the hard-pressed middle classes (the "squeezed middle") and therefore a heartland electoral target.

Pensions and savings:

One very convenient thing for the Chancellor is that it’s all about words - not necessarily about deeds.

So I expect there to be plenty of talk about further pension reforms - but that will only lead to a consultation.

Even if change does go ahead - there won’t be anything until 2016 and there are no guarantees.

There has already been reform to allow those who reach 55 to access their pension funds, this will allow retirement savings to be used more like a bank account than ever before.

To recognise this shift - there may be a change to the tax relief available to pension savers.

One possibility would be a standard rate of 30% relief on contributions.Now that the nature of pension savings is changing, there could be a shift in ISA rules, with a lifetime cap on what people can save.

This would be acknowledgement that many people will in future see their retirement pot in the way ISAs are now seen.

Government is also well aware that the new pension freedoms it has already announced will also lead to risks.

More over 55s will be targeted by scams eager to get their hands on retirement savings - and if there are further reforms to annuities that will be another attraction for criminals.

I'd expect the Chancellor to say something about what extra protections and warnings will be put in place to prevent a whole new scale of pension fraud.

If he does not do so, history may well judge that it was the fraudsters that were given new found freedoms.

Home ownership:

The Chancellor needs to avoid this looking like a budget that favours older citizens, what about the young?

Help getting on the housing ladder would be a desirable ambition that means Stamp Duty may face more change.

At the moment buyers start to pay at £125,000 that could be increased perhaps all the way to £250,000.

There could also be changes in planning rules to help speed up new home building.

Where we live:

The Chancellor will want to reach out beyond the London-centric - and that could mean new announcements on transport.

One possible would be a fast rail link across the Pennines between Leeds and Manchester.

There could also be help for rural areas getting super-fast broadband.

Our bad habits:

Mr Osborne scrapped the automatic duty increase on beer, and took 1p off it in 2013 and 2014.

The proximity of an election makes it even more likely he will go for a repeat of this technique.

Smokers can’t expect to see prices fall though, indeed many in the industry predict another rise in the penalty rate of tobacco tax - around 28p for a pack of 20.

Motorists:

The tax danger for drivers is that crude oil prices have dropped so much that the Chancellor may feel there is scope to add to the duty on petrol.

Good in theory, but highly unlikely I think in an election year.

Fuel duty has been frozen since 2011 and, despite the change in pump prices, that's likely to remain.

Ahead of the election it is tough to sort meaningful predictions from wishful speculation.

After the Budget it is likely to be just as hard to separate the fiscal from the political.