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What does the Budget mean for you?

23.08.2021

By Beehive Money

The Autumn Budget

Our mission is to make savings and more widely, finances, easier for our members to understand as we get that it can be overwhelming sometimes. Each year, the chancellor of the exchequer, Rishi Sunak, who's in charge of the government's finances - makes a Budget statement to MPs in the House of Commons. Today we're rounding up the sections of the most recent Government Budget announcement that we feel will affect our Beehive Money members. To have a look at the Budget as a whole, check out the BBC News or GOV.uk websites.

Unusually, today's budget is also taking place on the same day as the Spending Review which looks at longer-term plans for government departments.

Children, education and skills

  • As Rishi Sunak's described previously, there will be £3bn going to "turbo-charge post-16 education" to increase the number of places in skills bootcamps and creating traineeships. 
  • There's also going to be a separate £560m commitment for up to 500,000 people to receive free personal tutoring or digital training in maths through the Multiply scheme. 
  • £500m will be spent supporting parents and children in England with a network of family hubs
  • £300m will go towards "A Start for Life" offer for families including parenting programmes and help with perinatal mental health.
  • Just under £2bn new funding for helping schools and colleges. 

Homes 

  • £24bn has been set aside for a "multi-year housing settlement" with £11.5bn of this earmarked for building up to 180,000 new affordable homes. 

Travel 

  • Flights around the UK will be subject to a new lower rate of Air Passenger Duty from April 2023 which should help with the cost of living for those that frequently fly around the UK and boost local airports. To tackle the environmental flip side of this, a new 'ultra long haul' band of Air Passenger Duty will be added meaning the further you fly, the more you pay. 

Pay and wages

  • The National Living Wage is going up next April from £8.91 per hour to £9.50 for people aged 23 and over. 
  • The public sector pay freeze will be lifted.
  • The Universal Credit taper rate will be cut from 63% to 55% no later than 1st December. This should benefit nearly two million families. 

Taxes and duties

  • We already knew before the Budget announcements that national insurance contributions (NICs) will be increasing by 1.25% from April 2022 to provide more support for the NHS and social care. This increase will apply to class 1 (employee) and class 4 NICs (self-employed workers) and will be paid in the same way that it is currently - administered by HMRC. 
    "Downing Street says this means an employed basic rate taxpayer earning the median basic rate taxpayer’s income of £24,100/year in 2022/23 would contribute £180 more a year, while a higher rate taxpayer earning the median higher rate taxpayer’s income of £67,100/year in 2022/23 would pay £715 more a year." - Money Saving Expert
  • Use this calculator to work out the increases to your National Insurance.
  • Duty paid on alcohol will change and there will now be just six rates. The higher the percentage of alcohol, the higher the rate. This means weaker alcoholic drinks like beer and lower alcohol wine will have their rate reduced and stronger spirits will get more expensive. Sparkling wines will also have the same duty as equivalent strength non-sparkling wine. Good news for Prosecco lovers. Plus, there's a permanent cut to the price of a pint by 3p. 
  • The planned duty increase on fuel will be cancelled due to petrol and diesel being at the highest cost of all time at the time of writing. 


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