Chancellor Philip Hammond's first major statement since he took office – and the first since the Brexit referendum – contained a mix of measures, ranging from big infrastructure investments to a new savings bond.
But how will your family finances be affected?
From June next year, you’ll pay more for insurance, thanks to a hike in insurance premium tax. But you might also see the benefit of a crackdown on fraudulent claims, which might knock up to £40 off your car insurance.
There’s also a new savings bond on the stocks, a crackdown on cold calling for pension schemes, a ban on letting agent fees and investment in new housing stock.
The government will also continue to scrutinise the energy market, hopefully exerting downwards pressure on bills – especially expensive standard variable rate tariffs.
Here’s a detailed look at what will impact Brits’ pockets, purses and wallets over the coming months…
Insurance premium tax (IPT) is leaping by 20%, from 10% of premiums to 12%. That will add another £11 a year to a typical car insurance premium of £514 when the increase is implemented in June next year.
Home, pet and medical expenses insurance is also subject to IPT, so a family spending £1,000 a year on insurance would see the tax take rise from £100 to £120. Travel insurance is taxed at 20%.
On the plus side, the Chancellor confirmed that measures will be implemented to reduce the amount of money lost to insurance fraud as a result of exaggerated or fabricated whiplash claims following car accidents.
He said this should lead to savings of £40 per policy – provided insurance companies pass on the savings in full.
Petrol & diesel
Fuel duty will stay the same for the seventh year in a row. This saves an average of £130 a year for car drivers, and £350 a year for van drivers, according to the government.
With interest rates remaining at record lows, a new three-year savings bond will be launched through National Savings & Investments (NS&I) next spring.
The rise in IPT makes it more important than ever to shop around
Full details will be announced in next year’s Budget, but it’s expected that the ‘Investment Bond’ will have an interest rate of around 2.2% gross.
Savers will be able to put away between £100 and £3,000 and the bond will be available to those aged 16 and over.
As previously announced in the March Budget, Hammond confirmed the increase in the tax-free personal allowance to £11,500 in April 2017, with the threshold for higher rate tax rising to £45,000.
The ambition is to raise these to £12,500 and £50,000 respectively by 2020.
Work place salary-sacrifice schemes are also to be scaled back, with the exceptions of childcare, cycle-to-work, ultra-low emission cars and private medical cover.
The government will continue to invest in the energy sector, including upgrading smart meters and other sources of energy such as shale, to help bring down the cost of energy bills as oil prices rise.
In the coming months the government will also review the retail energy market, putting costly standard variable rate tariffs under particular scrutiny.
Mobile & broadband
Investment in 5G communications and wider access to fibre optic broadband was also outlined by the Chancellor. Funds will be allocated to local businesses to support the roll out in local areas.
Details on how rural areas, which to date have struggled to access faster speeds, will be supported were not revealed.
National Living Wage
The National Living Wage for those over 25 will increase to £7.50 an hour in April next year, up from £7.20. This will be worth over £500 a year to a full-time worker.
The National Minimum Wage will also increase as follows:
- From £6.95 an hour to £7.05 an hour for 21 to 24 year olds
- From £5.55 an hour to £5.60 an hour for 18 to 20 year olds
- From £4 an hour to £4.05 an hour for 16 to 17 year olds
- From £3.40 an hour to £3.50 an hour for apprentices
From April 2017, the Universal Credit taper rate will be reduced from 65% to 63%, with around 3 million households expected to benefit.
This means for every £1 earned after tax above an income threshold, the benefit will be reduced by 63p rather than 65p.
The government plans to hold a consultation before Christmas on how to tackle pension scams and ban cold calling.
As planned, from September 2017, working parents of three and four year olds will benefit from 30 hours of free childcare a week, up from the current 15 hours.
In early 2017, the government will begin to roll out tax-free childcare across Britain, which is expected to save up to £2,000 per child per year.
Infrastructure was high on the agenda in terms of improvement and spend, focussing around research and development, with increasing investment by 2020.
Around £23 billion will be spent over the next five years, with the aim of improving housing and transport links.
The Chancellor announced £220 million of spending to improve the country’s traffic pinch points, alongside £450 million to go towards digital railway signalling technology, with the intention of improving reliability and efficiency of transport.
He also confirmed the plan for major road schemes in the North of England, while £110 million will be invested in the Oxford – Cambridge expressway, connecting the country's two most prestigious universities, creating a ‘tech highway’.
The government will invest £2.3 billion in infrastructure to support up to 100,000 new homes in high-demand areas.
It will also invest £1.4 billion to help build 40,000 new affordable homes. The rules on how funding for affordable housing can be used will be relaxed.
Letting agents in England will be banned from charging upfront fees to tenants in private rentals ‘as soon as possible’. These fees can often add up to hundreds of pounds to would-be tenants’ costs.
There will also be a regional pilot of a Right to Buy scheme for Housing Association tenants.
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