Today’s Budget brings with it a wave of impactful changes that will resonate for each and every one of us.
From a substantial £40 billion tax hike to increased funding for the NHS and a rise in minimum wage, the government is certainly making bold moves to reshape the economic landscape.
With key investments in housing, education, and social care, this budget aims to address pressing issues while projecting a surplus by 2027-2028.
Let’s take a closer look at what these changes mean for individuals, families, and the country as a whole.
Taxes
The budget is getting a bit of a shake-up, raising taxes by a whopping £40 billion. Starting from April 2025, employers will see their National Insurance contributions jump by 1.2 percentage points to 15%. The threshold for when they start paying National Insurance is dropping from £9,100 to just £5,000 a year, which is expected to rake in about £25 billion annually.
Benefits
It’s largely good news for those who are disabled or long-term sick, with an extra £240 million earmarked for health and employment services. Plus, if you’re over 21, your minimum wage is set to rise by 6.7% to £12.21 an hour, which means about £1,400 more each year for full-timers. And younger workers aged 18 to 20 will see their pay jump by 16.3% to £10 an hour.
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NHS and Social Care
The NHS is getting a hefty boost with an extra £22 billion in the budget. This means 40,000 more hospital appointments and procedures every week. Plus, there’s £1.5 billion earmarked for new hospital beds, and local councils will get at least £600 million to help with social care.
Housing
There’s a big £5 billion investment in housing, which will ramp up the affordable homes program to £3.1 billion. Also, £1 billion will go toward removing dangerous cladding—very important after the Grenfell inquiry.
Fuel Duty and Alcohol
The 5p fuel duty freeze is sticking around until next year. And if you enjoy a drink, draft alcohol duty is getting a 1.7% cut, which could make your favourite tipple just a penny cheaper!
Tobacco and Vaping
Tobacco tax is going up with inflation plus an extra 2%, and there’s an additional 10% on rolling tobacco. Starting next October, there’ll also be a flat rate duty on all vaping liquids.
Education
From January 2025, private school fees will have VAT added, and business rates relief for private schools is being removed come April 2025. On a positive note, 500 outdated state schools will be rebuilt at a cost of £1.4 billion, plus an extra £300 million annually for school maintenance.
Transport
It’s exciting news for rail travel, with the HS2 link between Old Oak Common in west London and Birmingham confirmed. Tunneling will start soon to extend the line to London Euston.
Defence
The defence budget is expected to dip below 2.5% of GDP next year, but don’t worry; there’s still an increase of £2.9 billion for the Ministry of Defence.
Economic Outlook:
The government projects that public finances will be in surplus by the 2027-2028 financial year, hitting stability two years sooner than they initially planned.
For more details on today’s Budget announcements, follow these links:
Huge £500million boost to fix potholes across UK
A Universal Credit rule change on debt