Budget 2018 – a missed opportunity to support working families
Yesterday, Chancellor Philip Hammond delivered the 2018 Budget announcing the Government’s plans for tax and spending. The Chancellor promised that this would be a budget for “hard-working families” and that “the era of austerity was finally coming to an end”.
We’ve provided a summary of some of the main announcements impacting on families. While there was some welcome news, the lack of any mention of childcare will be a disappointment to working families across the UK.
What was missing?
Despite promises by the Chancellor to deliver a budget for hard-working families, there was no mention of the critical role that access to affordable, quality childcare plays in supporting families.
Prior to the Budget we called on the Chancellor to reverse the decision to close the Childcare Voucher scheme to new entrants, publishing evidence of the negative impact this has had on families. The Chancellor had an opportunity to stand with families by ensuring that they have access to the financial support they need.
However, there was no mention of Childcare Vouchers nor any suggestion that there will be essential improvements to the Tax-Free Childcare scheme. For example, Tax-Free Childcare is only available for children under age 12. We know that families are paying for childcare for older children and many of these families still need financial support.
In not re-opening Childcare Vouchers, or taking any steps to enhance Tax-Free Childcare, families have been let down.
While there was some welcome support for families impacted by the roll out of Universal Credit, more action is needed to address some of the biggest issues including the continuing benefits freeze and the five week wait for Universal Credit.
A summary for working families
So how is the Budget likely to impact on you?
- Universal Credit: The Chancellor announced a £1 billion package over the next five years to aid claimants’ transition to Universal Credit. Work allowances for Universal Credit will also be increased by £1,000 per annum, benefitting 2.4 million families by around £630 a year.
- Loans for low income families: A new low-interest loan system was announced for those in serious debt. It will provide an alternative for those who rely on high-cost credit and will see the government working with banks and debt charities to help design a pilot scheme that will launch early next year.
- Personal Allowance: The personal allowance (the amount you can earn before paying tax) will rise to £12,500 and the higher rate threshold to £50,000 in April 2019. This is worth £130 a year for a typical base rate taxpayer.
- Living wage: The National Living Wage will increase from April 2019 from £7.83 per hour to £8.21 per hour.
- Savings: The Individual Savings Account (ISA) annual subscription limit for 2019-20 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2019-20 will be uprated to £4,368.
- Owning a car: Fuel duty will be frozen again for the ninth year in a row.
- Stamp Duty Land Tax: All first-time buyers purchasing ‘shared equity’ homes of up to £500,000 will be exempt from stamp duty. The Chancellor also announced support to encourage new house building.
- Northern Ireland education: An additional £300 million was identified to support shared and integrated education projects.
- Education and health (England only): The Chancellor confirmed an extra £20.5 billion for the NHS over the next five years, with additional funding specifically for mental health services. A one-off £400 million was earmarked by the Chancellor, in language that has proven controversial, for schools to buy “the little extras they need” this year.
Get in touch: if you have any questions about what you and your family may be entitled to call our free Family Benefits Advice Service on 0800 028 3008. We can answer your concerns or questions about changes to your financial support, as well as carry out a personal benefits calculation to ensure you are claiming all you are entitled to.