By James Andrews, MSN Money, 22/04/2009 00:00

What the Budget means for you

Chancellor Alistair Darling has delivered his second Budget and we've gone through it with a fine-toothed comb to explain what it means for you.

High-income earners
In times of economic strife, high income earners are a favourite government target. True to form the chancellor announced income tax would increase to 50% for anyone earning more than £150,000 a year, effective from April 2010, a year sooner than expected.

Anyone earning more than £100,000 will see their personal tax-free allowance fully withdrawn from next April.

Additionally, people earning more than £150,000 will also lose some tax relief on their pension contributions. That means they'll eventually receive the same allowance of 20% that everyone else benefits from.

The unemployed
Just before the Budget was announced, new figures revealed there are now 2.1 million unemployed people in the UK, equivalent to 6.7% of the workforce. Many predict this will rise to 3 million in the next year or so. So what was Darling's plan for getting people back to work?

To minimise the impact of rising unemployment, the chancellor announced "steps to insure short-term job loss does not turn into a lifetime on benefits". To this end, he announced £1.7 billion of extra funding for employment support and additional support for people who have been out of work for more than 12 months.

Younger Brits received even more assistance. Everyone out of work for a year and under 25 set to be offered a job or a place in training.

There was also £260 million of new money allocated for training and subsidies in sectors with strong demand.

Share your thoughts on this year's Budget

First-time buyers
It's been a mixed year for people looking to buy their first home. On the one hand house prices have dropped and stamp duty has been suspended for some, but on the other banks have become far more tight-fisted with their cash and savings rates have all-but disappeared.

To help aspiring homeowners, Darling extended the suspension of stamp duty on homes worth less than £175,000 to the end of the year. He also announced an extra £80 million to the shared equity HomeBuy scheme.

There were also plans to increase housing supply by addressing issues that hinder people building houses; £500m of extra financial support to will re-start stalled building projects and £100 million will be made available to local authorities to make more energy-efficient.

Small businesses and owners
A freeze in the minimum wage, tax relief and a reduction in bureaucracy were on the wish-list for small business owners, but what did they get?

Alistair Darling promised to help by extending allowing loss-making companies to reclaim taxes on profits made in the last three years. He also tried to ease cash flow with a top-up trade credit insurance scheme.

he also announced the doubling of the capital allowance for investments to 40% and extra funding for digital investment

Civil servants
With tax income falling there were genuine concerns among the nation's public sector employees. Teachers, nurses, the police, the armed forces, firefighters, council employees and Whitehall staff were all faced with lower (if any) pay rises and worse pensions as well as an ominous "£15 billion in efficiency savings".

Darling announced £5 billion of the dreaded efficiency savings in 2010/11 and an additional £9 billon of efficiency savings by 2013/14.

Military homes also received £50 million in additional funding to aid modernisation.

Homeowners
With house prices falling and banks getting tough on borrowers almost a million people are now in negative equity.

To help, the chancellor said the mortgage interest schemes designed to stop people losing their homes in the event of job loss would be maintained at a higher level for another six months as long as homeowners are looking for work.

For people trying to make their homes more energy efficient there was £435 million extra support for homes and businesses.

There was also the introduction of a new mortgage security guarantee scheme - making banks more likely to lend (at least in theory).

Motorists
Drivers have not had a great time of it recently, with road taxes and petrol prices soaring. But with the car industry in trouble, things have been looking up recently for people who fancy a new set of wheels.

Darling said cars would become even cheaper. The car scrappage scheme will allow anyone trading in a car more than 10 years old to receive £2,000 to spend on a new one. This scheme will run from next month to March 2010.

However, there was no respite on fuel dute. The chancellor announced an extra 2p a litre tax would apply from September with the tax increasing 1p a litre above indexation each April for the next four years.

Drinkers and smokers
Anyone who likes a drink or is partial to a cigarette will pay more. The Budget announced a 2% rise in tax on both tobacco and alcohol from midnight tonight.

Savers
Savers were real winners. They saw ISA limits soar from £7,200 a year to £10,200 a year. Of that £5,100 can be invested in a cash account. The increase comes into effect this year for over-50s and next year for everyone else.

Pensioners
State pensions were set to rise in line with the RPI inflation, bad news considering the chancellor predicted that this would fall to -3% this year recovering to a mighty 0% next year.

To try and head off problems with this, Darling announced the state pension would rise by at least 2.5% a year regardless of the level of RPI.

To account for the loss of income from savings accounts that many older people rely on to supplement their incomes, Darling announced that people could receive pensions credit with up to £10,000 in savings, rather than the previous £6,000.

Darling also said the increase to the winter fuel allowance last year would be continued - meaning £400 for over 80s and £250 for over 60s to cover the cost of heating their homes.

Families
Help was announced for families as well. From April next year, the child element of the child tax credit will increase by £20.

On top of that, children with disabilities will receive an extra £100 a year in their child trust fund with those with severe disabilities getting £200 a year.

The role of grandparents in childcare was also acknowledged. The chancellor said he would "ensure these caring responsibilities for grandparents of working age will count towards their entitlement for the basic state pension".

To help families who experience job loss, Darling increased the statutory redundancy pay from £350 to £380 a week.

Poor