Autumn Statement 2014: Personal allowance upped to £10,600
The amount of money you are allowed to earn tax free will rise to £10,600 in April, £600 more than the current amount and £100 more than was initially planned.
Osborne added that he hoped he would be able to raise the threshold further to £12,500 by 2020.
The Chancellor said the change would save people £825 a year. Chief secretary to the Treasury, Danny Alexander, clarified this point and explained that the amount was the total benefit of all the increases in the personal allowance the coalition has made since 2010.
The level of earnings at which the higher-rate income tax of 40% kicks in will also rise in April to £42,385 from £41,865.
Kevin Mountford, head of banking at MoneySuperMarket, said: "With the economy clearly improving, today’s Autumn Statement shows the Chancellor trying to give money back to UK households by announcing some surprise giveaways. The first changes in the higher-rate tax threshold for five years, from £41,865 this year to £42,385 next year is definitely a step in the right direction."