Now the dust has started to settle on this year’s Budget, we look at whether it lived up to your expectations and what it means for your finances.
Areas Noddlers wanted to see change
In our recent survey, which included over 700 Noddle customers, we found that many feared there would be minimal benefits for them and nearly 4 in 10 stated the biggest beneficiaries would be businesses. Many of you admitted to feeling a squeeze on your finances, with 70% saying your outgoings were noticeably higher than they were this time last year.
Following the results from our research and the Budget announcement, unfortunately there were areas that Noddlers would have liked to have seen changes that weren’t addressed in the Spring Budget.
- 35% wanted better rate on petrol
- 28% wanted to see more support for those looking to get on the property ladder
- 23% wanted attainable savings options for people on lower income
When it comes to benefits for the country these were the top two things Noddlers were most concerned about:
- 45% want more funding for the NHS
- 25% would like to see more enforcement of taxes on big businesses
Self-employed to pay more tax
If you’re self-employed and earning a profit of more than £8,060, then from April 2018 you will pay 1% more in national insurance contributions, raising it to 10%. Another 1% rise will occur the following year, taking the overall NI tax for self-employed individuals to 11% in April 2019.
Currently, an employed worker pays 12% on anything they earn between £8,164 and £45,000.
News for savers
The National Savings and Investment Bond has been confirmed to launch in April this year, with an interest rate of 2.2%. The maximum savings that can be made is £3,000. Open to anyone over the age of 16, with a minimum investment of £100, the savings will be locked in a three-year fixed account.
Our poll found that 46% of people want better rates for savers. Whilst it was a welcome announcement that the rate for the NS&I Bond hasn’t changed since it was announced last year, savers will only earn £6 extra a year in interest than what they could get on the open market (over a three-year period, the account would earn up to £3,202 in interest).
Even before the Budget announcement, 4 in 10 planned to play it safe and use an everyday savings account instead of investing their money, showing consumers weren’t too confident in the savings options the Budget would offer.
Taxes on dividends
Currently, the tax-free allowance on dividends is set at £5,000, but this will reduce to £2,000 from April 2018. This could likely affect shareholders relying on their shares for retirement and small business owners paying themselves in dividends whilst receiving a small salary.
As of March 13th, tax on alcohol will rise again in line with RPI inflation. The price of a pint will rise by 2p, the first rise in beer tax in 5 years. Wine tax will increase by 10p a bottle.
Tax-free personal allowance
The research we did shows 56% of respondents wanted a change to the tax free personal allowance. It was confirmed that last year’s announcement of an increase in the threshold will go ahead from April 6th. The personal allowance will mean people will only be taxed on any earnings above £11,500, instead of the current £11,000 limit.
For higher-rate tax payers the threshold will go from £43,000 to £45,000.
A bit of mixed bag, this year’s first Budget announcement met some expectations and wants of Noddle customers. To find out if the tax changes will affect you, you can use the BBC’s Budget calculator tool, developed by Deloitte to see if you’ll be better or worse off.