George Osborne has appeared outside No 10 Downing Street brandishing the red briefcase, which means only one thing – the 2015 budget has been announced, but what does this mean for you and your family?
What are the biggest changes?
Child tax credit
If you receive child tax credit, you need to be aware that tax credits and Universal Credit are going to be restricted to just two children, affecting any children you may have who are born after April 2017.
The amount of tax you pay
We can all breathe a sigh of relief as the personal allowance (the amount of money you can earn before you pay tax) is going up rather than being frozen.
The current personal allowance will rise from the current £10,600 to £11,000 from next year. Even better news is that there are plans for it to continue to rise until 2020 when it should be as much as £12,500.
This means, if you’re a part-time mum (or dad) and are working less than 30 hours a week (on minimum wage), you won’t pay any income tax at all.
Minimum wage becomes living wage
More positive news on the financial front is, if you are currently being paid minimum wage and are 25 or over, you will find an extra few pennies in your pocket, as this will rise by 40p per hour, taking your hourly rate up to £7.20 from April 2016, and then rising by a further £1.80 to £9 by 2020.
And for high earners…
On the other end of the scale, if you are a high earner, it’s worth noting that the tax threshold has has now been raised from £42,385 to £43,000. This will come into effect next year.
What about day to day living?
The price of petrol
The good news is that fuel duty has been frozen so filling up your car won’t be any more expensive than it is already.
30 hours of free childcare
You may already be aware of this but from 2017 there will be 30 hours of free childcare for three and four-year-olds – although before you get excited, not everyone is entitled.
Social housing rents
If you’re living in social housing property, you’ll see your rent cut by 1% which will be frozen for the next four years. However, if you are a higher income family and still renting social housing, you won’t be so lucky, as you’ll find your rent will increase to match the market rate.
While benefits are to be frozen for the next four years and this includes tax credits as well as local housing allowance but maternity pay and disability benefits are exempt from this.
How will this affect your family in the long-term?
This isn’t the quite-so-good part…
Changes to student grants
Student maintenance grants are being stopped. This will come into effect at some point during 2016-2017. There will still be assistance from the government but this will purely be on a loan basis (new maintenance loan support) of up to £8,200, which will need to be paid back in instalments when the student starts to earn more than £21,00 per year.
What do think of the 2015 budget?