So after much speculation by the media, the Chancellor of the Exchequer, George Osborne has announced in the Budget today what the increase in the UK personal allowance will be for the tax year 2013-14.

The personal allowance will be increased to £9,205 which is a £1,100 increase from this tax year coming (2012-13) where the personal allowance will be £8,105.

The Chancellor said that the central goal of the budget was to support working families by taking them out of tax. The best way to get money into the hands of the people is to increase the amount of money that they can earn tax free, i.e. the personal allowance, and this is why they aimed to increase the allowance to £10,000 by 2015.

This is the largest ever increase in the personal allowance and this would make millions of working people £220 a year better off.