Budget at a glance George Osborne makes £12 billion in cuts to the £220bn welfare budget -------------------------------------------------------- Key points of Chancellor’s speech National living wage: Minimum pay of £9 per hour by 2020 – pay rise for 2.5 million people Public sector: Pay awards will be limited to 1% a year for next four years Income tax: Personal allowance up from £10,600 to £11,000. Higher rate threshold from £42,835 to £43,000. Tax rates remain unchanged Corporation tax: Cut to 19% in 2018 and 18% from 2020 Working-age benefits: Frozen for four years. New cap of £20,000 a year outside London and £23,000 in capital. Cap will affect 89,000 households and save £1.67bn over five years Earn or learn: Housing benefit for those aged between 18-21 to be abolished, exceptions for vulnerable people Pay to stay: Households earning more than £40,000 a year in London and £30,000 elsewhere to pay closer to market rates for their rented public housing. Current subsidies are worth up to £3,500 per year Fuel duty: Frozen. MOT on new vehicles extended from 3 to 4 years Excise duty: Duty based on emissions in first year for new cars from 2017, and three bands thereafter. Rate in “standard” band will be £140 – less than current average of £166. Tax used to improve roads Inheritance tax: Additional £175,000 transferable allowance for family home – £1 million tax free on death of last parent Dividend tax credit: Replaced by tax-free allowance of £5,000 of dividend income – one million people will see tax cuts TV licences: Cost for over-75s to be met by BBC, saving £650m NHS: Further £8bn in addition to £2bn already provided earlier this year Northern powerhouse: More powers for Greater Manchester, Leeds, Liverpool and Sheffield ------------------------------------------------- Total £220bn (2014-15) Pensions £95bn Tax credits £30bn Housing benefit £26bn Disability allowance £13bn Child benefit £12bn Other £44bn ---------------------------------------------------- Source: HM Treasury Picture: Getty Images words 316