Budget 2015: George Osborne set to slow the pace of welfare cuts

A tax windfall from pensioner spending could see some reductions delayed

George Osborne with his Treasury team outside 11 Downing Street, London, before heading to the House of Commons to deliver his first Tory-only Budget

George Osborne is set to slow the pace of welfare cuts when he presents the Government’s Budget to Parliament later today, it has been reported.

BBC News says the Chancellor will take three years instead of two to make the £12bn cuts – which have yet to be outlined in full.

Mr Osborne is thought to have more room for manoeuvre to make the reductions because of tax revenues being higher than projected in his March budget.

New pension reforms appear to have incentivised pensioners to spend large amounts of money and created a £700m windfall for the Treasury this year.

Social security faces £12bn cuts but they could be spread over a longer period

The Institute for Fiscal Studies says Mr Osborne announced roughly £1.5bn of the £12bn cuts before the election.

He is expected to make additional savings by cutting tax credits, which could save as much as £5bn depending on the scale of cuts.

A lower benefit cap outside London is also expected, as well as higher rents for some people living in social housing earning above-average incomes.

Measures previously outlined include a benefit cap and banning young people from claiming housing benefit.

While those receiving state aid will lose out from the Budget, high earners and the wealth are likely to benefit.

Those in line for a huge family fortune will benefit from the end of inheritance tax on homes up to £1m – costing the Treasury around £1bn.

The Daily Telegraph reports that the roughly top 10 per cent of earners paying the higher 40 per cent rate of tax will also receive a tax cut as the threshold rises.

The Budget will be Mr Osborne's first with a majority Conservative government and the first all-Tory one since 1996.