What’s in the spring budget 2024?
The Government’s recent spending announcements, part of its annual spring budget, included a raft of changes to tax rates and benefits that could affect your finances.
Here we look at several key points from Chancellor Jeremy Hunt’s speech.
National Insurance
The Chancellor announced that the main rate of Class 1 National Insurance tax is going to be cut by 2%, from 10% to 8%. The change takes effect from 6 April 2024, which is the start of the new tax year.
National Insurance is a tax that all workers earning over £12,570 per year must pay on their income. It pays for certain state benefits such as NHS services and the state pension.
Mr Hunt said the 2% decrease means someone earning an average annual salary of £35,000 could get an additional £450 a year.
Pensioners will not benefit from the National Insurance reductions because they are already exempt from paying it.
For more information, check out this Guardian article.
Household Support Fund
Low-income families facing financial hardship can access the Household Support Fund (HSF) for a further six months.
The HSF is money given to all councils to help support vulnerable families in their area with food and water and energy bills.
The HSF was due to end on 31 March 2024, but has been extended by £500 million to September 2024.
Budgeting advance loan scheme
The Government offers a budgeting advance loan scheme that gives people claiming Universal Credit an interest-free way to borrow money.
The repayment period for these loans has doubled from 12 months to two years.
The budgeting advance loans, which can be from between £100 and £812 are interest-free, are usually taken from future benefit payments. They’re designed to help pay for essential or unexpected expenses such as furniture, household appliances, rent deposits and moving costs.
Debt relief order
If you’re struggling with debt, you can apply for a debt relief order (DRO) from the Government.
To be eligible, you’ll need to meet specific criteria, including owing less than £30,000 and having less than £75 a month spare income.
The Government announced it is scrapping its DRO application fee, currently £90, from 6 April 2024. You will still need to contact a specialist debt advisor.
Check out our article on debt help for more information.
