HIGHLIGHTS-UK's Osborne delivers post-election budget

LONDON, July 8 (Reuters) - British finance minister George Osborne set out his plans to reshape the country's economy with the first budget of the new Conservative government on Wednesday.

Below are the highlights from the statement:

ON NATIONAL LIVING WAGE

"I am today introducing a new National Living Wage. We've set it to reach 9 pounds an hour by 2020. The new National Living Wage will be compulsory. Working people aged 25 and over will receive it.

"The OBR today say that the new National Living Wage will have, in their words, only a "fractional" effect on jobs."

ON WELFARE CHANGES

"Since the crash, average earnings have risen by 11 percent, but most benefits have risen by 21 percent. To correct that, we will legislate to freeze working age benefits for four years.

"That will include Tax Credits and Local Housing Allowance. And it means earnings growth will catch up and overtake the growth in benefits. We are also abolishing the automatic entitlement to housing benefit for 18-21 year olds."

"Rents paid in the social housing sector will not be frozen, but reduced by 1 percent a year for the next four years.

"The freeze in working age benefits, the downrating of social rents, and the focus of tax credits and Universal Credit on the lowest income households will reduce the welfare bill by 9 billion pounds a year by 2019-20.

"In future we will limit the support provided through tax credits and Universal Credit to two children.

"Families who have a third or subsequent child after April 2017 will not receive additional Tax Credit or UC support for this child."

ON NON-DOM STATUS

"We're going to change the law to stop the use of losses which abuse our controlled foreign companies regime, and make sure investment fund managers pay the full capital gains tax rate on their carried interest.

"Non-dom status was meant to be temporary, but it became permanent for some people. Not any longer. I am today abolishing permanent non-dom tax status.

"Anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains."

ON BUY-TO-LET

"Buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot. And the better-off the landlord, the more tax relief they get.

"So we will act. We will retain mortgage interest relief on residential property, but we will now restrict it to the basic rate of income tax."

ON PERSONAL TAX

"The higher rate threshold currently stands at 42,385 pounds. I am today raising it to 43,000 pounds from next year.

"A personal allowance of 11,000 pounds. A higher rate threshold of 43,000 pounds."

ON DEFENCE SPENDING

"And so committing today to meet the NATO pledge to spend 2 percent of our national income on defence. Not just this year, but every year of this decade."

ON PENSIONS

"Pensions could be taxed like ISAs. You pay in from taxed income - and its tax free when you take it out. And in-between it receives a top-up from the government.

"I can confirm that the Annual Investment Allowance will not fall to 25,000 pounds but be set at 200,000 pounds; this year and every year."

ON BANK LEVY RATE

"I will, over the next six years, gradually reduce the bank levy rate - and after that make sure it no longer applies to worldwide balance sheets.

"But to maintain a fair contribution from the banks, I will introduce a new 8 percent surcharge on bank profits from the 1st January next year."

ON GROWTH FORECASTS

"For 2015 the OBR forecast growth at 2.4 percent. In 2016 the OBR have growth unchanged at 2.3 percent - and it is then revised up to 2.4 percent in the following year; a level of strong, steady growth it predicts for the rest of the decade."

"The OBR forecast that under the current economic conditions, almost a million more jobs will be created over the next five years."

ON DEBT PLANS

"We should cut the deficit at the same pace as we did in the last parliament. At this pace the national debt is lower as a share of our national income in every future year than when I presented the Budget in March."

ON DEFICIT PLANS

"We can achieve a smoother path to the same destination. With a surplus a year later in 2019-20, but the national debt lower and that same surplus higher.

"This year it (budget deficit) is forecast to fall to 3.7 percent - one third of the deficit we inherited ... It then falls again to 2.2 percent in 2016-17, down to 1.2 percent in the year after that, and then to just 0.3 percent in 2018-19.

"The following year, 2019-20 we move into a budget surplus at 0.4 percent, which is then maintained in the year after that at 0.5 percent of GDP.

"Only when the OBR judge that we have real GDP growth of less than 1 percent a year, as measured on a rolling four-quarter basis, will that surplus no longer be required."

ON ROAD AND FUEL CHANGES

"From 2017, for brand new cars only, we will introduce new VED bands.

"In total we'll only raise the same amount of revenue from VED in the future that we do today - but that revenue will be secure for the long term.

"I can also confirm that there will be no changes to the plans for fuel duty I set out in March - fuel duty will remain frozen this year." (Reporting by Sarah Young, Kate Holton and Lucy Mortlock)