The Government released their budget plans on October 29 with changes being made to a range of money matters that will affect our residents: from pensions and benefits to the minimum wage.
But what do the changes really mean – and it is good news or bad news for you?
Workers will benefit from two changes come April 2019: as the National Living Wage will jump to £8.21 per hour for workers aged 25 and over – that’s 28p better off per hour. Under-24s will get £7.70 per hour and under-20s £6.15. Apprentices will get an extra 20p an hour – with pay rising to £3.90 an hour.
Meanwhile the amount you can earn before you start paying tax – known as your ‘personal allowance’ – will increase by £650 to £12,500.
Drinkers and smokers
January 2019 may be the time to make those over New Year’s resolutions to ditch the cigarettes and take it easy on the booze, as the amount of tax is set to rise: high-strength cheap cider and bottles of wine are set to increase in tax as of February -whereas tobacco has already gone up in tax following the budget announcement with a pack of 20 cigarettes experiencing an average of 28p extra tax. Spirits won’t be affected by the tax increases.
Universal Credit (UC) recipients
The good news: the Government is responding to many of the concerns that have been expressed by recipients and money experts by making changes to UC. This includes:
- Increasing the work allowance for those with children or classed as sick by £1000 per year – that’s around £85 per month.
- Two weeks of support will be offered during the transition to Universal Credit for new recipients.
- The maximum rate of debt recovery will fall from 40% to 30%, which will mean less money can be taken away from claimants for debts they owe
- Only earnings spikes that are above £2500 will have implications to your UC
- Additional protections to claimants, including enhancements to the protection of claimants moving onto UC, additional support for non-parental carers and adopters and enhanced protections for those currently transitioning from Severe Disability Premium into UC.
The bad news? Some of these improvements don’t start until 2021 – with the earliest change starting October 2019. For those wishing to see the end of UC, unfortunately the Chancellor Phillip Hammond, who sets the country’s budget, said “Universal Credit is here to stay”.
Not sure how the budget will affect your finances? Get in touch with our Money Advice Officer Steven for a free chat: firstname.lastname@example.org or 01925 246810