Here's the good news - at first glance, the Budget looks broadly positive for investors. Here's our take on the main points.
Firstly, the pensions industry can breathe a sigh of relief. Some pundits thought that George Osborne might scrap higher rate tax relief on pension contributions; he hasn't. And nor has he reduced the amount you can put into your pension each year: the maximum amount stays at £50,000 a year.
No changes were made to the individual savings account (Isa) allowance either. From 6 April, you will be able to put £11,280 into an Isa, with up to £5,640 of that going into a cash Isa. These allowances will increase in line with the consumer prices index (CPI) in future years.
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It does, however, look as though the government is paving the way for another increase in the state pension age there's a review this summer, and the plan seems to be to peg the pension age to average life expectancy.
The main highlight for investors is the cut announced in the UK corporation tax rate. The rate, which was expected to be cut to 25% in April, will now be cut to 24%. By April 2014, the rate will be 22%.
This is great news for investors. Lower tax rates mean more profits for shareholders, which may in turn allow for higher share prices and higher dividends. However, this will not apply to banks. The chancellor is increasing the bank levy so that they do not benefit from corporation tax cuts. Yet another reason to avoid the sector.
Energy firms may benefit too: the government is developing a strategy for gas-fired power generation later this year. Given that some gas-fired power stations are being closed or mothballed, anything that encourages gas may be positive for companies such as Centrica or SSE. A new minimum carbon price announced today also favours gas, but is bad for companies with big coal-fired stations - as they emit more CO2 - such as Drax, and also SSE.
New oil and gas tax measures should help North Sea oil companies.
On a more general note, the increase in the personal income tax allowance to £9,205 in April 2013 should increase disposable income in the economy. That said, the chancellor is still keeping in place a further 3p increase in fuel duty in August. With fuel prices close to record highs, this duty increase will hit consumer spending which could be bad news for retailers.
Finally, and most importantly, the current outlook for government finances hasn't got any worse. Given that the interest rates on government bonds determine the prices of many investments, bond yields look unlikely to rise sharply in the short-term. This is supportive for the economy and asset prices for now.
