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The Budget 2018: what it means for you and your money

Tue 30 Oct 2018

We’ve prepared an overview of what his announcements could mean for you and your family:

Your Health

The NHS – NHS funding in England will increase by £20.5bn over the next five years. This includes a £2bn increase in spending for mental health services in all England’s major A&E’s.

£10m has also been given to support the fantastic work of the air ambulance services which are funded entirely by philanthropy.

Social Care - £650 million has been pledged for English councils (for 2019-20) to fund social care. £55m for the Disabled Facilities Grant in England (for 2019-20) and £84 million to create more Children’s Social Care Programmes (over the next 5 years).

Your Income & Finances

Income Tax – the rise in the tax-free personal allowance (the amount you can earn before you start to pay income tax) will be brought forward by a year to April 2019. This will raise the allowance to £12,500 with the higher-rate tax threshold increasing to £50,000.

Self-employed – the VAT threshold will remain unchanged for a further two years with the Chancellor confirming he is exploring options to address the ‘cliff edge effect’ of VAT registration. For smaller firms taking on apprentices, the amount they have to contribute through the apprenticeship levy will halve from 10% to 5%.

National Living Wage – will increase by 4.9% from £7.83 to £8.21 an hour from April 2019.

Welfare – a package of measures worth £1bn over the next 5 years will be used to support the switch to Universal Credit.

Your Property

Landlords – From 2020, the government will limit Lettings Relief to properties where the owner is in shared occupancy with the tenant.

First Time Buyers – stamp duty exemption will be extended to all first time buyers of shared ownership properties valued up to £500,000. There will also be £500m more for the Housing Infrastructure Fund in a bid to build 650,000 homes as well as a consultation on the simplification of the process for converting commercial property into new homes.

Your Savings

ISA Allowances – the ISA annual subscription for 2019-20 will remain unchanged at £20,000. The annual subscription for Junior ISAs will increase in line with CPI to £4,368.

Your Retirement

Pension Tax Relief – the lifetime allowance for pension savings (the limit on the value from your pension schemes before triggering an extra tax charge) will increase to £1,055,000 for 2019-20.

Pensions Dashboards – the government is taking steps to support the launch of the Pension Dashboard, this tool will for the first time allow an individual to see their pension pots, including their state pension, in one place.

Pensions for Self-Employed – This winter, the Department for Works & Pensions, will publish a paper setting out the government’s approach to increasing pension participation and savings persistency among the self-employed.

Your Lifestyle

Transport – the fuel duty rise for both petrol and diesel will be frozen for the ninth successive year.

Roads & Infrastructure - £420m will be pledged to help local authorities fix pot holes, bridge and other road repairs.

Tobacco Duty – will increase at the rate of inflation plus 2%.

Alcohol Duty – duties on beer, cider and spirits will be frozen. The cost of a bottle of wine will rise 8p, in line with inflation, in February.

Protecting the Environment – a new tax on ‘the manufacture and import of plastic packaging which contains less than 30% recycled plastic’ has been announced.

UK Digital Services Tax – a new 2% digital services tax on UK revenues of big technology companies will be introduced in April 2020.

The High Street – £675m will be committed to create a Future High Streets Fund to support council’s drawing up formal plans for the transformation of high streets. In addition, for the next 2 years, all retailers in England with a rateable value of £51,000 or less will have their business rates bill cut by a third.

Education

School Budgets – There will be a £400m in-year bonus to help schools buy the equipment and facilities they need.

Other Policies

Policing & Counter-Terrorism – The chancellor says he ‘recognises’ policing in general is under pressure. Based on this the Home Secretary will review police spending power and further options for reform. Counter-terrorism funding will be increased by £160m to protect officer numbers.

Centenary of First World War – To mark the centenary, a £10 million payment will be made to the Armed Forces Covenant Fund Trust to support veterans with mental health needs. There will also be £1.7m for educational programmes in schools to mark the 75th anniversary of the liberation of the Bergen-Belsen concentration camps.

The Defence Budget – there will be an extra £1bn for the defence budget over the next two years.

Funding for Brexit – The Chancellor has set aside an additional £500m for Brexit preparations. He has also reserved the right to upgrade next spring’s statement to a full fiscal budget if the UK leave the EU without a deal.

To find out how the Budget will affect you, take a look at the BBC’s budget calculator.


Type of article: Articles
Category: Saving my money

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