How will the 2020 Budget affect the pounds in your pocket?

March 11, 2020

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How will the 2020 Budget affect the pounds in your pocket?
What with the long list of daily tasks and commitments most of us have, it can be difficult to find time to pore over the details of the Government’s Budget.

So, we’ve cut through the endless commentary on new chancellor Rishi Sunak's speech to MPs in the House of Commons and put together a synopsis of the main points that will affect the pound in your pocket.

The day started with a dramatic decrease in interest rates, with the Bank of England reducing the base rate from 0.75% to 0.25%, making it cheaper to borrow 📉

The Budget itself was one of vast spending commitments and one strongly influenced by Coronavirus 🦠. In real terms, the Chancellor said, public investment will now be at its highest since 1955. We saw a £30bn Coronavirus-related stimulus package to plug any economic gaps left in its wake, £175bn over five years for investment infrastructure, which includes key services like the NHS, and a £5bn spend on better broadband 💻

Here’s more:

 Tax

  • Come next year, the planned increase in duty on spirits and beer will be cancelled.
  • Duty on wine, cider and fuel will be frozen.
  • The National Insurance Contributions tax threshold will rise from £8,632 to £9,500.
  • The ‘tampon tax’ has been abolished.

Earning and saving

  • The Living Wage will go up to £10.50 an hour by 2024.
  • The Junior ISA and Child Trust Fund allowance is set to increase from £4,368 to £9,000 in April, for the 2020/21 tax year.

Health and benefits

  • The minimum income level for Universal Credit has been temporarily removed to absorb costs for those who have been advised to self-isolate due to COVID-19 and are not entitled to sick pay.
  • Under these temporary measures, successful benefits claimants are now entitled to claim from day one of making their application, which replaces the usual ‘waiting period’.
  • For those who have been advised to self-isolate due to COVID-19, there will be a telephone service via 111, whereby people can request a sick note there and then.
  • Businesses with fewer than 250 employees will be compensated for any money they’ve lost as a result of employees having to take up to 14 days off due to the virus.
  • Mr Sunak promised that the Government would do “whatever it takes” to stem Coronavirus outbreaks and will provide extra NHS funding to deal with the crisis.
  • 40 new hospitals around the country will be built.

Education

  • Funding specifically for specialist maths schools will be available around the UK.
  • £1.5bn over five years will be dedicated to making further education better.

Homes and the environment

  • £12bn will be poured into building affordable homes.
  • Electric car drivers will never be more than 30 miles from a rapid car-charging hub.
  • £120m for flood damage repair will be available immediately, as well as an increased budget for future disaster relief.
  • There will be a tax on plastic packaging.

Let us know your thoughts on this year’s Budget and whether or not it will leave you better off, by tweeting @myeva_app. 

For more on financial wellbeing in the workplace, visit www.myeva.com or join our LinkedIn community to see how others are improving the financial wellbeing of their workforce.

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