Autumn Budget 2021: What does it mean for your wallet?
27th October 2021
Author: Daniel Sharpe-Szunko (Insurance and Mortgage expert)
Chancellor Rishi Sunak yesterday announced some key changes to reducing taxes to be “my mission over the remainder of this parliament”. Yesterday’s budget was all about getting the economy back to normal, decrease borrowing and to keep lending under control.
Here’s some of the key points and how it affects you
How does the UK economy look post-COVID?
- Inflation: Currently sits at 3.1% and expected to increase to 4% in the next 12 months
- Economy forecast: Expectations are set to return to pre-COVID levels by 2022
- Unemployment: Predicted levels of unemployment were 11.9%, however they are now expected to peak at 5.2%
- Wages: Since February 2020 there has been an increase of 3.4% because of labour shortages and high levels of unemployment
- Borrowing: GDP currently sits at 7.9% in 2021 and is expected to reduce to 3.3% in 2022
How has the Budget impacted the UK public?
- Universal Credit: Taper to be cut by 8% from 63p to 55p
- Affordable Housing: £11.5bn committed to build up to 180,000 properties
- Minimum Wage: Rates for minimum wages and apprentices to increase from 1st April 2022
- Fuel Duty: Planned rise has been cancelled due to record petrol and diesel prices
- Job Entry Support Scheme: Additional £90m commitment to help reduce unemployment levels
- Parental Support Scheme: £302m to provide breastfeeding services and parent-infant mental health support
- Alcohol Duty: Frozen for the third consecutive year which could save consumers approximately £3bn
- Homeless Support: Commitment of £639m per year by 2024-25 (increase of 85% from 2019) to help put a stop to sleeping on the streets
- Crime Prevention: £355m to be put towards keeping our streets safe, reduce crime rates, and help victims of sexual abuse
What impact has the Budget had on business owners?
- Business Rates: Retail, hospitality, and leisure industries in England will be eligible for a new 50% discount
- Busines Rates Multiplier: Planned increase in 2022 has been cancelled
- Annual Investment Allowance: Temporary extension of £1m moved to March 2023 to help investment in growth
- Busines Rates Improvement Relief: Scheme to be announced soon which offers 1 years relief for companies investing in property
- Bank Surcharge: Cut from 8% to 3%
What impact will the Budget have on public services?
- Diagnostic Services: £2.3bn to be spent on 100 diagnostic centres around England in the next 3 years
- Digital Technology Innovation: £2.1bn to be spent over the next 3 years to support hospitals keeping them connected to other care services
- Surgical Hubs: £1.5bn to be spent on increasing bed capacity and elective services recovery over the next 3 years
- Schools Budget: Additional £4.7bn for the core schools budgets by 2024-25 in England, including £2.6bn for children with special educational needs and disabilities, and £1.8bn for education recovery services
- Criminal Justice System: To help clear backlogs in the UK courts caused by COVID, additional £1.9bn to bring offenders to justice
What is the government doing to boost the UK economy?
- Government Spending: Increase of £150bn by 2025 in spending which is the largest of this century
- Devolved Nations Funding: Increases of £4.6bn to go to the Scottish government, £2.5bn to the Welsh government, and £1.6bn for Northern Ireland
- Development Projects: 25% increase up to £20bn by 2025 in UK research
- Investment Incentives: £750m in England, includes ‘Eligible Green Investments’ tax relief
Visit Budget and Spending Review – October 2021: What you need to know – GOV.UK (www.gov.uk) for more information about the Autumn Budget.