Budget 2012: Largest ever increase in personal allowance

Chancellor George Osborne has pledged the largest ever increase in the personal allowance tax rate.

From next April, a rise of £1,100 in the personal allowance threshold will move the bottom bracket for low income earners to £9,205.

The aim remains to reach a personal allowance rate of £10,000 which will be generated through “real increases every year”, says Osborne.

Osborne said this will leave low income workers £220 a year better off – £170 after inflation is incorporated.