6 min read

What the new autumn budget means for your money

23 November 2017

It didn't make for the most exciting hour of tv, but Philip Hammond's budget speech was important. Here’s what his Budget means for you…

Let’s be totally frank and honest: the chancellor’s Budget can be pretty boring.

Yes, it’s incredibly important for the country and yes the decisions can have an enormous effect on our household income and outgoings. But truth be told, the lengthy economic statements and ponderous jokes can be a little… dry.

However, some big decisions were taken today that will directly affect how much cash you have leftover each month.

That’s why we’ve pawed through the chancellor’s speech and notes, dull jokes and all, and dug out what we believe to be the most important takeaways.

So here’s what was announced in Hammond’s Budget and what it means for you.

Tax-free allowance will go up

The tax-free allowance is the amount you can earn before the taxman starts to take a share. From April next year that will rise by £350 from £11,500 to £11,850. (You can see all the current rates here).

Hammond says that this means a typical basic rate taxpayer will be more than £1,000 better off than they were in 2010. The point at which a taxpayer starts to pay the higher rate of 40% is also being hiked, up to £46,350 from the same date.

Stamp Duty SCRAPPED for new buyers

This was definitely the biggy from this Budget and the headline Hammond hopes will be remembered above all else. First-time buyers will no longer have to pay Stamp Duty for properties worth up to £300,000. If the property is worth up to £500,000, buyers still won't pay stamp duty on the first £300,000.

However, this rule doesn't apply if you're a first-time buyer spending over over £500,000 on a property.

Analysis of this announcement has been a little critical, with some questioning whether this will have much or any benefit for first time buyers.

National Living Wage is rising

It’s being increased from April by a decent 4.4%, up to £7.83 an hour, up from £7.50 at the moment.

Yet before we get too carried away with the good news it’s important that you understand that the National Living Wage is what the government now calls the minimum wage.

However, it’s still a long way off what campaigners say is the actual living wage, currently set at £8.75 an hour.

Despite that, it is good news for those on minimum wage as this will be a pay rise of around £600 a year.

Cheaper train travel

The government desperately wants to appeal to younger voters, having lost a lot of them to Labour in the last election.

So, it had a think about what kind of things Young People liked and came up with rail travel.

The 16-25 railcard that offers carriers a third off train journeys is to be extended to include people up to the age of 30.

In other news, people in their 30s are seething.

Universal Credit is getting a shake-up

There has been a huge amount of political pressure around Universal Credit, as stories of hardship and poverty accompanied its wider roll-out.

Now the chancellor plans to address some of those issues. He’s scrapping the seven-day waiting period so that people become entitled as soon as they claim. That will cut the six-week wait to five-weeks; an improvement but still a long time.

Households affected by the roll-out will be able to claim an advance within five days, but that will still be a debt that they have to repay over the next 12 months.

Booze and smokes

Duties on wine, spirits and beer have been frozen, meaning the cost might rise with inflation but it won’t be increased further by a hike in government levies.

White ciders are to be exempt from that freeze and the government plans to increase the duty on such drinks from 2019 as part of an attempt to discourage problem drinking.

Smokers are also being hit, with tobacco duty continuing to force prices up by inflation plus 2%. There’s also an extra 1% duty on rolling tobacco.

Fuel duty frozen

Driving is an expensive habit thanks to rising insurance and fuel costs. So motorists will be happy to hear that Hammond scrapped the planned hike in fuel duty that had been due to come into force in April.

While that may well be good news, drivers of new cars that do not meet emissions standards face a higher rate of Vehicle Excise Duty starting from April next year (HINT: If you’re desperate to buy a less-efficient new diesel car then it might be an idea to get shopping now to avoid the hike).

Air Passenger duty frozen too

You may not bother breaking down the cost of your air travel, but part of what you pay is the Air Passenger Duty. That was also due to rise in April until Hammond pledged to freeze the rate for both short and long-haul economy travel.

That freeze will be funded by a hike in duty on premium tickets and private jets.

And that’s a wrap

So there it is, Budget 2017. Fewer mentions of austerity than usual, none of the usual tinkering with savings accounts or pensions.

But it remains to be seen whether any of these changes will make an actual difference to households in the UK affected by the lack of improving wages and rising inflation.

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