How the Spring Budget affects you and your finances

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How the Spring Budget affects you and your finances

Lifetime news

Posted on: 06/03/2024

The Chancellor of the Exchequer Jeremy Hunt delivered his Spring Budget to the House of Commons this afternoon (March 6th).

Let’s have a quick look at how his decisions may affect you and your finances.

As widely anticipated, Mr Hunt’s key announcement was a further 2% cut in National Insurance for working people and the self-employed, taking it from 10% to 8%.

This follows a previous NI cut from 12% to 10% in January.

The latest 2p cut will save someone earning an average wage of £35,000 an additional £449 a year.

However, government critics are keen to point out that previous changes to tax rules mean the amount people pay overall is still rising.

The Chancellor also announced that from April 2024 full child benefit would be paid to households where the highest-earning parent earns up to £60,000 (the current limit is £50,000). And partial child benefit will also now be paid where the highest earner gets up to £80,000 (up from £60,000).

There will be consultation on linking child benefit to family income not individual income, and that could be introduced by April 2026, Mr Hunt added.

Other Budget points:

  • Introduction of £5,000 ‘British Isa’ tax allowance to encourage individual savers to invest in UK-based assets
  • Freeze on alcohol duty to continue until February 2025
  • New tax on vaping products to start in October 2026, after consultation, while tax on tobacco to increase
  • Tax paid on flights (Air passenger duty) to go up for business class
  • Fuel duty is frozen again, with the 5p cut in fuel duty on petrol and diesel kept for another year
  • Government fund for people struggling with cost of living pressures to continue for another six months
  • Threshold at which small businesses must register to pay VAT raised from £85,000 to £90,000 from April
  • Stamp duty relief for people who purchase more than one dwelling in a single transaction to be cancelled
  • Non-dom tax regime, for UK residents whose permanent home is overseas, to be replaced with new rules from April 2025.
  • The higher rate of capital gains tax on residential property will be reduced from 28% to 24%

Those critical of the government’s Budget say that it hasn’t done nearly enough to help the millions of UK households currently struggling with the cost of living.

And this is what’s coming down the tracks from April:

  • Council tax rates rise
  • Mobile and broadband bills go up
  • Water bills increased
  • TV licence goes up
  • Car tax upped

Spring may have sprung – but can you see shoots of recovery in your personal finances?

If you don’t know what it all means for you and your finances then Lifetime can help. Our financial wellbeing and planning programme offers education, guidance and support. Get in touch: www.lifetime-fm.com


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