How will the budget affect your family?
Friday, March 18th, 2016 | Posted in Blog
This week, Chancellor George Osbourne unveiled his 2016 budget plans . There’s been lot’s of information in the news, so we thought we’d wade through the headlines and explain how your family could be affected. As well as highlighting the two main changes, we’ve got updates for unemployed/low earners and those on disability allowance too.
Don’t forget, we’re here to help families. So if any of these changes will impact on you, we can help.
- The Personal Allowance will increase to £11,500, and the higher rate threshold will rise to £45,000 in April 2017*
The Personal Allowance is the amount of income you can earn before you start paying Income Tax. This is currently £10,600 – it will already rise to £11,000 in 2016, and will now increase further to £11,500 in April 2017.
For higher earners, the point at which you pay the higher rate of Income Tax will increase from £42,385 to £43,000 in 2016 and to £45,000 in April 2017
So, in theory, you will have more money in your pocket at the end of each month. The amount you gain will depend on how much you earn.
Work out yours using Money Saving Expert’s handy income tax calculator
- Earn as you save with the government’s new Lifetime ISA*
From April 2017, any adult under 40 will be able to open a new Lifetime ISA. Up to £4,000 can be saved each year and savers will receive a 25% bonus from the government on this money.
So for every £4 you save, the government will pay in an extra £1.
No relief for unemployed or low earners
Sadly, if you are unemployed or a low earner none of the changes will make a positive impact on your household. Tax Credits, Child Benefit and Housing Benefit have all been frozen for 4 years, so while there will be no further cuts, there will be no rises in line with inflation either.
Gingerbread Chief Executive Fiona Weir commented: “Much mileage will be given to the Chancellor’s savings announcements, but when single parents are forced to borrow money from friends and family in order to cover the cost of childcare, what good is a lifetime ISA? What good is an increase to the personal tax allowance if you’re earning below the threshold, or forced to work on a zero hours contract?”
You can read her full article here>
Changes to disability benefits
While no changes to PIP’s have been confirmed this week, the government is looking to reform the system, following an independent review, to improve how claimants are assessed and treated.*
Currently, recipients of PIPs are assessed using a points system to determine what level of help they receive. Claimants can get between £21.80 and £139.75 per week.
The money is meant to help people cope with the extra cost of living with a disability or long-term health problem and are used to fund everything from mobility cars to adapted baths and showers.
The reform will mean that from next year people will only be awarded one point, instead of two, if they need aid to help them use the toilet or get dressed – resulting in lower or no payments.**
The following articles outline the proposed changes in more detail, so please read on if you think they could affect you.
Don’t forget, FTCT grants are here to help families who are experiencing financial difficulties.
As long as you work or have recently worked in UK fashion or textiles (examples listed above) and have a child aged 0-18 years, we are here for you. Grants start at £250 and can fund items including clothing, bedding, shoes and school uniform.
If you have any questions, please call Dora on 0300 123 9002 or fill in our online enquiry form.