How will #Budget2016 affect you? The Chancellor said “we have to act now so we don’t have to pay later”, and we’ve heard proposals for cuts, funding and changes that could affect all of us around the country in different ways.
We’ve picked out 5 key areas from #Budget2016.
- Changes to income tax - As promised in last year’s summer budget, tax-free personal allowance will rise from £10,600 in 2015/16 to £11,000 from April. It will then go up a further £500 in April 2017 to make it £11,500 that you can earn before you have to start paying income tax.
The 40p tax threshold rises from £42,385 to £43,000, with a further increase to £45,000 in April 2017 as the Chancellor speeds up attempts to increase it £50,000 by 2020.
- Spending cuts - The Chancellor has announced there will be an extra £3.5bn cut from spending in 2019/2020, with “Sensible reforms to keep Britain living within its means.”
Although changes to the disability budget were announced in which spending will increase by £1 billion, he said that within that, “support is better targeted at those who need it most”, which could refer to the controversial reform of Personal Independence Payments from January 2017.
There was a lot of talk about fuel duty being increased, but it is now to be frozen for the sixth year in a row.
- Personal savings – A new “lifetime ISA” will be introduced for the under-40s, in which for every £4 they save up to the age of 50, the Government will give them £1. The ISA limit was also increased from £15,000 to £20,000. And the ‘Help To Save’ scheme is to top up savings for those on working tax credits or universal credit who put aside up to £50 a month.
- Schools becoming academies - The big news here is that all schools in England are set to become academies, and be removed from local authority control.
Also, a £1.5bn package of extra funding has been earmarked for education, in large part to lengthen school days: at least a quarter of secondary schools are to be given funding for an extra 5 hours a week. And Maths will be taught to all pupils up to the age of 18.
- Infrastructure - The Chancellor said ‘we are the builders’, and in this Budget he gave the green light to a number of transport investments especially in the north. HS3 is the high-speed rail link that will cut the journey from Manchester to Leeds by around 50%, while upgrades to major roads such as the M62 and a planned tunnel link between Manchester and Sheffield. And in the south, Crossrail 2 which would be a north-south link through the centre of London to complement the east-west Crossrail link set to open in 2017.