On the 15th March, the Spring budget was presented by Chancellor Jeremy Hunt, laying out the government’s fiscal plans for the coming year. The plan is to deliver on three of the five key priorities that were set out by the Prime Minister in the Autumn Statement last year – halve inflation, grow the economy and get debt falling.
It sounds like a good plan, but what does it actually mean for all of us? Here are some of the key announcements to highlight:
It was also announced that childcare support will be expanded significantly, rolling out in phases from April 2024. Eligible working parents of children aged 9 months to 3 years will receive 30 hours of free childcare per week, for 38 weeks of the year (from September 2025). This will be in addition to the 30 hours already in place for eligible working parents of 3-4 year olds.
This will be a big boost for parents with young children, helping them return to or stay in work, and will help to keep the economy growing. Additionally, there will also be more funding allocated to “wraparound” care for before and after school clubs, with ambition that this will be offered by all schools by September 2026.
Hunt’s “back to work budget” consists of a package of measures to get people back in to employment. These include scrapping the work capability assessment, introducing a new voluntary employment scheme for disabled people, and a scheme to make more support for mental and physical health available to workers.
The Government has launched a new initiative called “Returnerships” – this is a new offer which is targeted at those aged 50+ who are wanting to return to work in a new sector. It will offer 3 programmes to help get older workers back in to work; Apprenticeships, Skills Bootcamps and Sector-Based Work Academy Programmes (SWAPs). Apprenticeships and most Skills Bootcamps will be available to all, but only jobseekers who are claiming, Job Seeker’s Allowance, Universal Credit or Support Allowance will be eligible for SWAPs. The Government is aiming to deliver 64,000 training places on the Skills Bootcamps from next year, and around 40,000 new SWAPs places.
One of the biggest surprises from this year’s budget is the proposed removal of the cap on the amount of pension savings someone can have, known as the Lifetime Allowance. This is currently £1,073,100, and will be removed entirely as of the 6th April 2023.
Chantal Baker is the Director and Founder at Champ Consultants Ltd, an accountancy and tax consultancy practice located in Croydon Road. We spoke with her on what this actually means; “The lifetime allowance in pension pots will be abolished, meaning there is no ceiling to how high your pension pot can be.”
The Government are hoping to entice higher-paid older workers, such as doctors, to remain in the workplace, by lifting the annual limit on tax-free pension contributions from £40,000 to £60,000.
Chantal said “Unused allowances can be carried forward for up to 3 years. If you have already started taking money from your pension, you usually cannot put in more than £4,000 per year into a pension, this is being increased to £10,000.”
Cost of Living
Consumer rights champion, Martin Lewis, campaigned for energy bills to remain at £2500 and not be increased to £3000. His campaign was backed by 130 charities and consumer organisations. Jeremy Hunt confirmed that the price guarantee will remain until July, by which point current predictions are showing that the Price Cap should hopefully fall. The price guarantee doesn’t mean that bills will get cheaper, as the winter energy support scheme comes to an end in April, so people will still have to pay more on their energy bills, but it’s hopeful that these costs shouldn’t increase for a while.
It was also announced that those with prepayment meters will receive extra help as charges will be brought in line with comparable direct debit charges.
While there were plenty of positive announcements in the budget, it is always a good idea to seek the advice of professionals who can offer detailed expertise based on your specific situation. Caterham Valley is home to several well-respected Financial Services businesses who have the skills you need.
If you are a business looking for additional support with your company accounts or taxes, contact Champ Consultants to see how they could assist you.
Alternatively, if you are an individual looking for personal Financial planning support, speak to Kenley Financial Management and Wingate Financial Planning who can advise you on how to reach your financial goals.