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* Osborne reveals stronger UK growth forecasts
* Government sticks with plan for budget surplus by 2018/19
* Big changes in rules for savers and pensioners
* Manufacturers get help on energy bills and investment (Adds impact of pension changes on insurers, gilts)
By William Schomberg and David Milliken
LONDON, March 19 (Reuters) - British finance minister GeorgeOsborne courted voters ahead of an election in 2015 withpromises of help for savers, tax breaks for manufacturers andlower levies on beer and bingo.
In an upbeat annual budget statement on Wednesday, Osborneannounced upgrades to official forecasts for economic growth,although he stressed he would stick to his belt-tightening planswhich include a cap on welfare spending.
His help to savers - who have been hurt by near-zerointerest rates - included an easing of requirements onpensioners to buy annuities.
The government will also create savings accounts which willpay above-market interest rates to people aged over 65.
Shares in insurance firms fell on what Osborne called the"most far-reaching reform" to pensions in nearly 100 years.Legal & General stock closed more than 8 percent lower.
The price of 30-year British government bonds suffered their biggest one-day drop in a month, as insurers whosell annuities are a major source of demand.
Shares in gambling firms also weakened on news of a new taxfor the industry, even as Osborne cut a levy on bingo.
Britain goes to the polls in May 2015 and the annual budgetplan is one of the government's last opportunities to make adifference to how people feel about their finances before then.
The opposition Labour party said the budget failed to helpordinary people.
Osborne hopes the improving economy and his focus on fixingBritain's public finances will be trump cards in the fightagainst Labour, which remains a few percentage points ahead ofthe Conservatives in opinion polls.
"I have never shied away from telling the British peopleabout the difficult decisions we face. And just because thingsare getting better, I don't intend to do so today," he said,adding more spending cuts would be needed after the election.
Osborne announced the latest in a series of increases in howmuch people can earn before paying income tax. He also raisedthe threshold at which British earners pay a higher tax rate of40 percent for the first time since the 2010election.
Treasury officials stressed the budget did not represent arelaxation of the government's fiscal drive.
New forecasts by the Office for Budget Responsibilitypainted a picture of solid recovery with the economy now set togrow 2.7 percent this year.
That was higher than a projection of 2.4 percent made asrecently as December and much higher than the OBR's estimate of1.8 percent a year ago, when Britain was still struggling toshake off the after-effects of the global financial crisis.
"That's the biggest upward revision to growth betweenbudgets for at least 30 years," Osborne said to cheers frommembers of his Conservative party.
Growth in 2015, Osborne said, was expected to be 2.3percent, up slightly from December's forecast of 2.2 percent.
The OBR's forecasts, while higher than in December, are lessoptimistic than many others. The Bank of England expects growthof 3.4 percent in 2014 in Britain, faster than most otherdeveloped economies.
Even so, the economy remains smaller than it did in 2008,before the financial crisis, underscoring how slow the recoverywas before picking up speed in the last 12 months.
In a bid to help put the recovery on a sounder footing,Osborne announced a doubling of a tax break for firms thatinvest and measures to help bring down electricity bills.
The government has been trying to reduce the reliance of theeconomy on consumer spending since it took power in 2010.
DEBT REDUCTION
The improved outlook shaved 24 billion pounds ($40billion)from the official forecasts for Britain's still-hugebudget deficit over the next few years. It also means debt islikely to peak at slightly less than previously thought.
Britain will run a budget deficit of 5.5 percent of GDP nextyear - half its level at the time of the May 2010 election, butstill well above the level elsewhere in Europe and higher thanOsborne had pledged to reduce it to when he came to power.
To help keep Britain on track with its plan to get rid ofthe deficit by the 2018/19 fiscal year, Osborne said thegovernment will cap the amount of money it spends each year onwelfare at 119 billion pounds in the 2015/16 fiscal year.
Labour leader Ed Miliband criticised Osborne's budget.
"Today the chancellor (Osborne) simply reminded people ofthe gap between his rhetoric and the reality of peoples' lives -living standards falling for 44 out of 45 months under thisprime minister, unmatched since records began," he said. "Noamount of smoke and mirrors can hide it."
With an eye on Scotland's independence referendum, Osborneannounced new tax breaks for investment in North Sea oil and gasproduction. He also took a swipe at Scottish nationalists,noting that the OBR had revised down its estimate of how muchtax revenue could be raised from Scotland's oil and gas reservesby a further 3 billion pounds.
Osborne also froze duties on whisky and other spirits, amove which is likely to be welcomed by Scottish distilleries.
($1 = 0.6034 British Pounds) (Additional reporting by Andy Bruce, Ana Nicolaci da Costa,Jemima Kelly and the UK bureau; Editing by Jeremy Gaunt andCatherine Evans)
