The Budget


The Budget

What’s the Spring Budget and what does it mean for you? 

The Spring Budget is an important yearly event that lays out how the UK government plans to spend, borrow and tax. These decisions affect the finances of individuals, households and businesses.  

We’re here to explain what these changes could mean for you. 

This article isn’t advice or any form of recommendation. We don’t offer tax advice – if you need help, please get in touch with an independent tax adviser. 

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Latest changes

Find out how the Chancellor’s plans for housing, income tax, benefits and more could affect you.

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Chancellor chat

It’s almost impossible for Chancellors to avoid financial terms when they speak. Here’s a guide to some of the most commonly used terms.

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Money matters

The Budget’s the big one but other major Government updates impact your household budget too. Discover tips and advice on how you can take control with our money management guides. 

  • Your income and tax

    Your income and tax

    Yesterday’s budget included changes to National Insurance which could affect your income.

    Here are some of the key changes to be aware of: 

    • National Insurance: 2% cut to Employee National Insurance contributions (NIC), will bring down the rate from 10% to 8%. NICs for those who are self-employed have also been reduced, cutting the main rate of Class 4 self-employed NICs to 6%. Meanwhile, income tax rates haven’t changed and stay at 20%, 40% and 45% respectively for basic, higher and additional rate taxpayers (Scottish income tax rates may differ). The threshold at which you start to pay income tax, known as your personal allowance, stays at £12,570 for the 2024/2025 tax year. For more information on tax rates and allowances, read our guide
    • VAT threshold for small businesses: There was some good news for small business owners – the government has increased the amount you can earn before you need to register for VAT. From 1 April 2024, this threshold is going up from £85,000 to £90,000. 
  • Your benefits

    Your benefits

    Here’s a summary of the headlines:  

    • Increased Child Benefit thresholds: Previously, families earning over £50,000 per year had their Child Benefit reduced. Now, this limit has been raised to £60,000. Additionally, the threshold at which the benefit is fully withdrawn has been extended to £80,000
    • Childcare rollout confirmed: Although the Chancellor didn’t announce any new childcare changes, he did confirm plans announced in his previous budget would go ahead. So, from April 2024 working parents of two-year-olds will be eligible for 15 hours of free childcare per week. From September 2024, this 15 hours of free childcare will be extended to working parents of all children aged nine months and over. And from September 2025, the full entitlement of 30 hours of free childcare per week will be available for eligible working parents of children under the age of five
    •  Additional Universal Credit help: While the 2024 Spring Budget didn't directly change Universal Credit amounts, it did extend repayment periods for loans from 12 to 24 months and ended the £90 charge for getting a Debt Relief Order. The Chancellor also pledged to continue supporting struggling families through the Household Support Fund. 

    Changes announced in the Autumn Statement 2023: 

    • State pension payments: The government previously confirmed that the state pension will increase by 8.5% to £221.20 from April, with no change to the retirement age of 66 (rising to 67 in 2026 and 68 later). 
  • Your investments

    Your investments

    Here’s a summary of the announcements:  

    • New British Individuals Savings Account (ISA):This will incentivise investments in UK companies and extend the allowance beyond the existing £20,000 per tax year. The launch date has not been announced, as the government promised to consult on the details
    • New British Savings Bond: The Chancellor introduced a new 3-year fixed-rate savings bond that’ll be delivered through National Savings and Investments (NS&I) in April. The government will announce more information on the interest rates soon
    • If you’re able to put away some extra money each month, you might want to start saving. See our guide to saving and investing, or learn how to set and track savings goals with our app. 

    Changes announced in the Autumn Statement 2023: 

    • A package of planned ISA simplification changes
    • Capital Gains Tax (CGT): Before 6 March, it was decided that from April 2024, the annual CGT exemption would halve to £3,000. Just two years ago, this allowance was £12,300. It’s now much smaller  
    • Dividend allowance: This is the amount you can earn tax-free from share dividends each tax year. It’ll reduce to £500 for the 2024/2025 tax year 
    • Pensions: The government will be looking closely at British pension funds to check that they have enough British assets in their portfolios. It wants to boost overall UK investment and sees pension funds as a good way of achieving this goal.  
  • Your spending and bills

    Your spending and bills

    The cost-of-living crisis and the global surge in energy prices have affected some household finances in recent years. Rising inflation has also resulted in higher prices for products and services.   

    Against that challenging backdrop, here’s a recap of the big announcements:   

    • Fuel duty cuts extended: The existing 5p per litre cut in fuel duty has been extended for another year, maintaining the current rate 
    • Freezes to alcohol duty: The planned 3% rise in alcohol duty has been scrapped, and the current rate will stay in place until February 2025 
    • Vaping and tobacco: A new excise duty will be introduced on vaping products in 2026 to discourage non-smokers from vaping. Additionally, there will be a one-off increase in tobacco duty 
    • Air travel: The government has announced an increase in Air Passenger Duty (APD) for non-economy passengers, making business class and first class travel more expensive. 
  • Your property

    Your property

    Property related announcements were focused on those who own more than one home. These included changes to holiday rentals aimed at freeing up more accommodation for longer-term lets.

    These are some of the headline announcements: 

    • Holiday rental changes: The Chancellor is changing the furnished holiday lettings regime. This makes it less profitable for second homeowners to rent to (short-term) holidaymakers
    • Stopping stamp duty relief for multiple purchases: The government is also ending stamp duty relief for individuals purchasing multiple properties. This is known as the multiple dwellings relief
    • Reduction of capital gains tax for residential property: The government also announced a reduction in the higher rate of capital gains tax for residential property that is sold. It moves from 28% to 24%.

The Budget

Usually held once a year in the spring or autumn, the Chancellor outlines plans for the nation’s finances – and what it means for your money.

Some years can see more than one Budget – e.g. after an election, a change of Government or drastic economic circumstances. 

Spring (or Autumn) Statement

Although historically seen as having less impact on household finances than a Budget, it’s still considered to be a major seasonal update on the Government’s finances.

Think of it as a check-in, months after a Budget, to let the country know how it’s all going.  

Spending Review

These tend to take place every two to four years and set out what the Government expects to spend on public services (and where) over the next few years. 

Other announcements

Governments typically aim to deliver one Budget and seasonal statement a year. But major events – both political and economic – can put pressure on Chancellors to deliver extra financial updates. Previous examples include the mini-Budget in September 2022.

What does the financial language mean?

As custodian of the nation’s purse strings, it’s almost impossible for any Chancellor to avoid using lots of financial terms when they speak.

You’ll often hear the same words and phrases over and over again, and if you’re unsure of their meaning, it’s easy to lose track.

Here’s a guide to some of the most commonly used terms.

We don’t offer financial, legal or tax advice. Tax laws can change and how they can affect you depends on your situation. If you need help, please get professional advice. You’re responsible for managing your own taxes, money and legal matters – this includes making any filings and payments and following applicable laws and regulations.

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