The Budget covers the government’s economic, social and political policies but why is it important to you? Any of the policies put through could affect your personal finances in one way or another. Before this year’s Budget was announced we asked you what you’d most like to see the Government tackle. Over 1,000 Noddlers got in touch and we found their main concerns were three Ps: pay, and earning more before tax; petrol prices; and pensions. Now George Osborne has given his speech did he deliver on the issues that matter to you?
Whilst we already knew the tax free personal allowance, earnings before you have to start paying tax, was being raised to £11,000 in April, seven in 10 respondents in the survey wanted to see a change to this. The new Budget outlines plans for a further increase of £500 in April 2017, raising the allowance to £11,500.
However the higher rate income tax threshold will also increase to £45,000 in April 2017.
Despite fuel prices having fallen in the last few years, it is still a big issue for consumers with 43% of Noddle users listing a cut to or freeze on fuel duty as a priority. It seems their concerns may have been met as the chancellor announced another freeze again in 2016-2017 which would see the typical motorist save £75 a year. This would mean fuel duty will have been frozen 6 years.
It’s been nearly year since the pension freedoms were handed out to British savers over the age of 55 allowing them to access 100% of their pension and our research found that 42% of people don’t want any change to pensions. Inevitably meaning a tax-free lump sum can still be taken at 55.
Whilst there has been pension changes in the current Budget the government has announced the introduction of a ‘Lifetime Isa’ addressing concerns over young people not saving enough. The new plan will apply to anyone under 40 and allow them to save up to £4,000 each year and receive a 25% bonus from the government. The money saved can be used as retirement income or withdrawn for help with buying a first home.
A massive 75% of those surveyed said they’d like to see greater enforcement of taxes on big businesses by the Government. However they may be disappointed to hear that corporation tax will in fact be cut to 17% in 2020, having already been slashed from 28% to 20% since 2010.
Also Mr Osborne has set a new threshold for small business rate relief which will exempt 630,000 businesses from paying any business tax. The rate will rise from £6,000 to £15,000.
Health and NHS
Our research showed that funding for health services was another big concern. Two-thirds of Noddle users wanted more funding for NHS however this was not something that was touched on in this Budget.
Over half of respondents who had said they’d like to see greater investment in mental health will be glad to hear that the government plans to offer new peer and specialist support for those suffering from mental health conditions as well as for young disabled people.
More support for people wanting to buy their own home was still listed as a priority by over a quarter of Noddle users (26%), despite the Government having already introduced a number of measures in recent years to support people on to the housing ladder.
The new ‘Lifetime ISA’ we mentioned above is another initiative the government is taking to help those wanting to get on the housing ladder except this aims to help young adults under the age of 40 to save for their first home.
What else was covered in the 2016 Budget?
- A sugar tax on the soft drinks industry will be introduced from 2018 with a levy of up to 24p a litre and said to raise £520 million in the first year. The levy will not however apply to pure fruit juices and milk.
- The annual ISA limit will rise from £15,240 to £20,000.
- Beer and spirit duty will be frozen.
- The ‘sharing economy’ will benefit from a tax break of £1,000 – specifically those ‘sharing’ goods and services as well as property such as Airbnb hosts.
What was least popular amongst Noddlers?
Those surveyed expressed less interest in infrastructure spending with only 16% saying they’d wanting more spent on projects like HS2. Well, we can confirm that George Osborne gave his go head for HS3 between Leeds and Manchester as well as Crossrail 2 in this month’s Budget.
What do you make of March’s Budget announcement? Let us know your reactions to Budget 2016 with our short survey. You can take the survey here.