Details of the Spring Budget have been announced by Chancellor Jeremy Hunt. The statement has covered the current health of the economy, its improvement since the Autumn Statement and the new changes to be made. Here, we’ve detailed these changes so that you can see how they may affect you.
Energy prices
Some welcome news is that the energy price guarantee has been extended for another 3 months from April to June. As well as that, the proposed increase of £500 to the energy price cap from April has been cancelled. This means the average annual energy bill per household will stay at £2,500 rather than increasing to £3,000.
If you use a prepayment meter, you generally end up paying £45 extra per year for your energy costs. From April 2024, the fees charged with be cut so that the amount you pay will be brought in line with the amount paid by those using direct debit.
Childcare
Numerous changes have been made regarding childcare. Nurseries will receive extra funding and parents who have children aged between 9 months and 2 years will now benefit from 30 hours of free childcare.
The government will pay childcare costs upfront for parents who claim Universal Credit and the maximum amount that can be claimed for childcare by families on Universal Credit will be substantially increased.
Payment incentives have been offered via a pilot scheme to those taking childminder jobs. Individuals applying for childminder jobs will receive £600 whereas those applying via agencies will receive £1,200.
Pensions
The lifetime pension allowance (LTA) is to be abolished, encouraging people to continue working for longer. As well as that, the ceiling on annual tax-free pension contributions has been increased by 50% from £40,000 to £60,000. This allows you to save much more in your pension fund before being taxed.
Employment
An apprenticeship has been announced for those aged over 50. This will offer training to entice people to return to work.
The Work Capability Assessment is to be axed. This means that those with disabilities can rest assured they’ll still receive health benefits if they start working.
Universal Credit
Claimants of Universal Credit will have to increase the amount of time they work each week or face cuts to their benefits. The weekly Administrative Earnings Threshold has been increased from 15 to 18 hours per week.
Corporation tax
Corporation tax will still increase as planned for businesses from April. The increase will be from 19% to 25%.
Fuel duty
Fuel duty will stay frozen and the 5p cut is to be extended for a further 12 months. This means you don’t have to worry about a price hike every time you fill up.
Cigarettes and beer
The price of cigarettes will increase considerably with a pack of 20 costing £1.15 extra. Duties on draft beer served in pubs, however, will decrease. This means that the cost of a pint of beer in a pub will be 11p less than in a supermarket.
Get expert advice on the impact that the Spring Budget may have on your finances
If you think any of these changes may have an impact on your mortgage or savings, just give us a call on 01322 907 000. Our mortgage and protection brokers can take a look at your current mortgage deal to see if will be affected by your new circumstances. Alternatively, we can arrange a consultation for you with a specialist financial organisation we collaborate with for pension advice.