How Does the 2012 UK Budget Affect Families?

The 2012 UK Budget was announced by Chancellor George Osbourne in March and it brings with it many changes. New budgets are always controversial because they benefit some demographics of people more than others and this year is no exception.

How will the new budget affect the average family in Britain in the coming months and what will it mean for your personal finances?

2012 Budget Changes

Some of the most significant tax changes in the 2012 budget included increases in personal income tax allowance and new rules about child benefits.

Previously, families with at least one parent earning more than £40,000 per year were set to lose their child benefits. However, under the new budget the cuts will only kick in when a member of the family earns at least £50,000 per year. These cuts will not kick in immediately for parents; they will be withdrawn gradually at 1% for every £100 earned over £50,000. As a result, an extra 750,000 people will keep a portion of the benefit and only people who earn more than £60,000 will lose it altogether.

However, the way these benefits work does not accommodate for the cumulative income of a household. For example, a family where one parent earns £45,000 per year and the other earns £15,000 per year has a total income of £60,000 and yet would still receive the standard child benefit of £1,055.60 per year because neither person earns over the threshold.

Meanwhile, in another family only one parent works and earns £60,000 per year. This family would not receive child benefit even though they have a lower total income than the family in the first example. Many families feel that this is unfair because families with higher total income can receive more benefits than a family where only one partner is working.

Working Tax Credit Changes

Another change in this year’s budget is to the working hours rules for Working Tax Credit. Up to 200,000 families throughout the UK could lose £4,000 per year due to the limit on working hours being raised from 16 hours per week to 24 hours per week.

However, the Government has also brought in some changes that it thinks will benefit working families, such as reducing fuel duty and freezing Council Tax. Also, families with children over the age of 16 will benefit from over 40,000 new apprenticeships and more technical colleges being formed.

Do these changes to the 2012 budget make a difference to your family? How will you be affected by the new budget?

Is it Safe to take out a Personal Loan during a Recession?

When the economy is in a slump, is it a smart decision to take out a personal loan?

While a recession means that personal loan interest rates will be at a low-point, it also means that your job and finances might also be on the rocks. Taking advantage of the low interest rates might be advantageous, but only if you can handle taking on debt.

Recession Might Bring Better Interest Rates

In some situations, a recession might actually benefit those who are looking for the best interest rate on personal loans. While the economy is not doing so well the banks are able to get their money at a lower rate, because the government will want to give the economy a boost. This means that they can pass the savings along to you and offer lower interest rates on their personal loans. This is meant to encourage people to apply for loans and stimulate the economy to get going again.

If taking out a personal loan is a good idea financially for you, the recession might be a good time to do it because you can benefit from lower loan interest rates. Personal loans will have much better interest rates than payday loans or car title loans and so you will end up paying much less in the long run.  If you are already paying high interest on a credit card debt, paying it off with a low-interest personal loan might put you in a better position. However, it is important to make sure that you capable of taking on new debt in a shaky economy where your job might be at risk.

Ask Yourself: Is It A Good Idea to Take On New Debt?

Taking on new debt such as the repayments on a personal loan might not be the best idea during a period of recession. This is because during a recession your job is at its most vulnerable and many companies will be making cutbacks. If you suddenly find out that you have been made redundant or that your hours have been cut back at work, you might find it increasingly difficult to make your loan payments. This could cause you to fall into arrears with your debt and get into even more trouble. In a worst case scenario, over-leveraging yourself in this way could even lead to bankruptcy. Taking on new debt during a recession is always risky and should be approached with caution.

If you really need cash during a recession, you might want to think of other ways to obtain it. Can you change your spending habits and cut your expenses so that you have more money left over to cover your needs? You could also consider selling any possessions that you don’t need to make a bit of extra money.

These are just a few important things to think about before taking out a personal loan in a recession. 

Chinese Company Bright Foods Buys Out Weetabix

Currently the top story being read on the BBC news site is "Weetabix bought by Chinese Firm".

It has shades of the whole Cadbury being bought by Kraft. A cheese company buying the nations' favourite chocolate brand? All the chocolate will start tasting horrible! And it's a US company -- look at America's history of chocolate making and all anyone ever seems to hear is that it's not especially nice-tasting.

Yet on a day-to-day, picking up a chocolate bar as a treat from the supermarket basis, little seems to have changed.

So the news that Weetabix, originally a family-owned company in Northamptonshire, has been bought by a Chinese company seems to have attracted many readers on the website, most likely for the apparent incongruent nature of the two involved parties.

Bright Foods is the company that has done the buying, purchasing a 60 percent share in the food product.

With the Weetabix trademarked cereals making up 7% of UK breakfast cereal sales, it is currently generating around £101 million each year.

Chairman of Bright Foods, Zongnan Wang, says this move will allow the brand to reach a much wider market, opening out to Chinese and International consumers, and that Bright Foods are "excellently placed to develop the Weetabix business".