How does the budget affect my personal finances?
For those without work: Those who are unemployed see a small rise of 0.5%, to £74.70 per week, in their job seekers allowance. Those on furlough see continued support.
Families: Those with kids see small rises in their child benefits and tax credits. Small changes in the tax rates, national insurance and personal allowance mean pretty insignificant changes to the budgets of most families. Notable exceptions are two unemployed parents with two kids, who are as much as £451.36 a year worse off. Also, single-income couples, one disabled, with two children, see as much as a £635 rise in their income. Families with two kids, where the couple are married, see a bigger rise of around £639, thanks in the most part to a £500 one-off payment if you receive working tax credits.
Couples: The way the chancellor approached this budget means a barely noticeable change to the finances of most couples.
Pensioners: The state pension credit this year means an additional £265.20. The uprating of pensions may see some enjoy a small increase in their retirement finances.
If you’re employed: Furlough notwithstanding, it was a quiet budget for those who are employed. That “fiscal drag’ we mentioned is a “carry on as you were” statement from the chancellor.
For savers: The ISA tax rates, children’s savings included, remained the same. The charge on unauthorised withdrawals from Lifetime ISAs was reduced to 20% when the pandemic began, but will be returning to 25% as of 6 April 2021.
There was a coded warning that “Interest rates won’t stay low forever”, but there was no signal of an immediate change from the Bank of England.
For those who want to “save green”, the new ‘green’ NS&I savings bond may be a way to do just that.
If you’re looking for investment advice, read our comprehensive guide to savings and investment planning or contact one of our investment specialists today.