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Benefits and entitlements 2011 tax updates

There have been a number of changes to entitlements, including how they are measured, which will actually take place on April 11, 2011.

Changes to how entitlements are increased will not be across the board. Some will increase in line with the consumer price index (CPI) inflation rate, while other the rest with more complex structures.

 The basic state pension will increase to £102.15, up £4.50, because it is based on rises in the Retail Prices Index (RPI) from the previous September, which recorded 4.6 per cent at the time. After this year, the benefit will rise in line with one of three measures -average earnings, CPI, or 2.5 per cent - whichever is highest.

 Pension saving rules have also been implemented, which reduce the annual allowance for tax-free pension saving. Tax relief qualification for pension will drop to £50,000 each year from the previous limit of £255,000.

 For families, there have been a number of contentious changes that have been introduced. Read the tax credits updates from the 2011 budget for a thorough explanation of the new guidelines.

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