Budget 2012: the winners - Telegraph The personal allowance - the first tier of earnings on which no tax is due - is to rise next year from £7,475 to £9,205, an increase of more than £1,000. Millions will be more than £200 a year better off. The centrepiece of the Budget, the move will cut the tax bills for anyone earning less than £100,000 and will lift two million people out of paying tax. The tax-free allowance is set rise again to £10,000 in April 2014 - saving most taxpayers another £250 annually. This is a year earlier than planned. Plans to scrap child benefit for higher-rate taxpayers have been watered down. The Chancellor said he wanted to avoid a cliff edge - so instead of withdrawing it all at once, the benefit will start to be withdrawn only when an earner brings in more than £50,000 a year, rather than at about £42,000, and it will be withdrawn gradually - 1pc of benefit for every £100 earned over £50,000. As a result, an extra 750,000 people will keep some or all of this benefit; only those earning more than £60,000 will lose it altogether. The basic state pension will rise by £5.30 a week from April 6, as already announced, and a new single tier pension worth about £140 a week will be introduced early in the next Parliament The extra income tax personal allowance for the elderly has been frozen in cash terms and will be abolished when the standard personal allowance catches up with it. From 2014 taxpayers will get a personal tax statement detailing how much of their tax bill goes to pay for services such as health care and education. 85pc of local authorities will be freezing or reducing their council tax next year. Budget 2012: the losers • Latest updates on the 2012 Budget • Budget 2012: key points