Chancellor Rachel Reeves has revealed a Budget that includes a range of announcements from tax and spending to pay and pensions. The Budget will have a direct impact on many people’s finances and wallets. Here are some of the key takeaways from the Budget.
If you earn a minimum wage, your pay will rise in April. The National Living Wage, for those aged 21 and over, will increase from £11.44 an hour to £12.21. For those aged between 18-20 years, the National Minimum Wage will rise from £8.60 an hour to £10. The minimum wage for those aged 16 or 17 will rise from £6.40 an hour to £7.55. The apprentice rate will increase from £6.40 an hour to £7.55.
Though the increases are smaller, they will help low-paid workers who have been disproportionately impacted by the pandemic. Employers will bear the cost of the pay increase, which some say could affect job prospects and a potential rise in prices.
Single bus fares outside of London and Greater Manchester will be increased to £3 in 2025, up from £2. Fuel duty has not increased since 2011 and will not increase in the Budget. Inheritance tax will become more significant, with the inclusion of inherited pensions from April 2027 that could put more estates over the inheritance tax threshold. Capital gains tax will increase from 10% to 18% and from 20% to 24% for higher-rate taxpayers.
Scotland has its own income tax rates, but the Budget does not affect VAT paid when purchasing goods and services. The state pension will rise by 4.1% in April, and universal credit will rise by 1.7% in line with inflation. In contrast, millions of pensioners will lose their winter fuel payment, worth up to £300, due to a government cut.
Overall, the Budget will not have a significant impact on most people’s finances, except for those on low incomes, the beneficiaries of pay increases
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