The Spring Budget 2017: what it could mean for you
On 8th March, Philip Hammond delivered his 2017/18 budget statement.
Here's how his announcements could affect you.
NHS and social care
£100m has been pledged to the NHS to reduce Accident and Emergency waiting times.
In response to the much-publicised shortages in social care funding, the chancellor promised £2bn to improve social care.
One of the more controversial announcements was an increase in national insurance for the self-employed - moving from 9% to 10%. In 2019, it will increase to 11%.
Update: On Wednesday 15th March, the government U-turned on this announcement. There will be no increase in national insurance for the self-employed.
Transport and infrastructure
£90m has been pledged to improve transport and infrastructure in the North.
The Midlands will receive £23m, from a £220m fund.
Hammond committed to increasing the personal allowance by 2020, a promise the Conservative party made in their 2015 manifesto.2
The personal allowance (not to be confused with the Personal Savings Allowance) is the amount of money you're allowed to earn before you have to start paying tax.
In 2015, the Conservatives also promised that by 2020 the 40% tax rate wouldn't kick in until £50,000.2 The chancellor committed to this, too.
Hammond announced that inflation would peak at 2.4% in 2017, then fall to 2.3% in 2018, and 2% in 2019. This is in line with targets.
Buy to Let
Hammond announced no changes to the contrversial Buy to Let tax changes announced by his predecessor George Osborne. Currently, landlords only pay tax on rental earnings after the interest on their mortgage has been subtracted. But once the new tax year begins on 6th April 2017, that tax relief will be scaled down, being capped at 20% by 2020-21.
First time buyers
The chancellor didn't announce a reduction in stamp duty for first time buyers. The decision not to cut stamp duty was criticised by Glynis Frew, chief executive of Hunters Property, who said:
"It was unsurprising but still a shame that the chancellor did not address the issues with stamp duty. Stamp duty should be slashed for first time buyers, it is absurd to think first time buyers in London and the South East are finding themselves in the third tax band and are therefore paying a whopping 5% when first stepping onto the ladder.
"It's no secret that there are less first time buyers entering our market than ever before and this unfortunately has a knock-on effect for second steppers and further up the ladder."1
However, house price growth is expected to continue to slow down throughout 2017.
Hammond announced that the free childcare entitlement for parents of three- and four-year-olds will double from September to 30 hours. The changes could be worth up to £5,000 per child.2
As announced in George Osborne's 2016 budget, the annual ISA allowance will increase on the 6th April 2017, when the 2017/18 tax year begins. The allowance will increase from £15,240 to £20,000.
The Money Purchase Annual Allowance for people who have accessed their private pension will be reduced to £4,000 per year.
This article is intended as a summary only, this information does not constitute financial advice given by Leeds Building Society. No reliance should be placed on this information, we recommend that you seek independent financial advice if you have questions or queries.
Contains public sector information licensed under the Open Government Licence v3.0.