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Budget 2018
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Budget 2018 - What you need to know

The Budget for 2018 has finally been unveiled – here’s a rundown of the most important things you need to know.

Tax changes put money in your pocket

Chancellor Phillip Hammond left his best announcement until last in a speech that lasted over an hour, confirming that the personal allowance for basic rate taxpayers will rise to £12,500 in April 2019, a year earlier than planned, putting an extra £130 into our pockets.

Meanwhile, the personal allowance for higher rate tax payers will go up to £50,000, taking an extra million people out of the higher income tax bracket.

National Living Wage to rise

National Living Wage for those over 25 is also set to rise next April from £7.83 to £8.21 per hour – an annual pay increase of £690 a year. Rates will also go up for:

  • 21 to 24 year olds from £7.38 to £7.70 per hour
  • 18 to 20 year olds from £5.90 to £6.15 per hour
  • 16 to 17 year olds from £4.20 to £4.35 per hour
  • apprentices from £3.70 to £3.90 per hour.

Help for young people

Over 4 million young people will also benefit from the 26-30 railcard giving one-third of non-peak fares as the scheme is rolled out in England, Scotland and Wales. Users can expect to start saving on travel by the end of this year.

Breathing space for those struggling with debts

In a bid to help people trapped in debt to get back on track with repayments, the government will be looking at launching a breathing space scheme giving up to 60 days’ relief from interest charges and payment chasing by creditors.

There are also plans to pilot interest free loans in partnership with the free debt advice agencies, and banks starting next year, based on Australia’s Good Shepherd model. This is a scheme that offers affordable loans to low-income households dealing with serious debts, helping them to avoid running up more debt or turning to high cost credit.

Premium Bond updates

Government savings providers NS&I are offering people other than parents and grandparents the choice to gift premium bonds for children along with introducing a new minimum £25 investment level.

Beers, ciders and alcoholic drinks prices staying the same, but not wine

There was also good news for some drinkers with a freeze on beer, cider and spirits duty, saving 2p on the price of a pint of beer and 30p on a bottle of gin or whisky. Wine drinkers didn’t fare so well with Retail Price Index (RPI) increases on a bottle of wine, while smokers will continue to see the price of a packet rise by inflation plus 2%.

Universal Credit changes

For families with children and disabled people on Universal Credit, there will be increases to the work allowance – the amount they before their Universal Credit award begins to be withdrawn –will be increased by £1,000 from April 2019. This should benefit around 2.4 million households.

And weddings just got easier

For anyone planning a wedding there may soon be the option to choose from a greater variety of venues as the government is looking at plans to cut the red tape around where and when people can get married. It should help to keep the costs down too.

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