The Spring Budget 2023 – How Will I Be Affected?

The Spring Budget 2023 – How Will I Be Affected?

On March 15th, 2023, the Chancellor of the Exchequer announced the UK’s budget for the fiscal year 2023-2024. The budget covered a range of topics, from taxes and energy bills to childcare support; here are some of the key points.

Energy prices

The Energy Price Guarantee will remain at £2,500 a year, it was announced.

The Government confirmed the Energy Price Guarantee – which dictates what most households in the UK pay for energy – will be kept at £2,500 a year for three months from 1 April, instead of raising it by 20% as planned.

Childcare support

Several changes are being made to childcare supports for parents, including:

• New free childcare. From April 2024, anyone living in England with a two-year-old will be eligible for 15 hours of free childcare. This will rise to 30 hours for any child aged from nine months to school age from September 2025.
• Upfront funding for childcare costs for people claiming universal credit. Anyone eligible will get the first month’s charges paid for them before they start to pay in arrears. The maximum amount available will increase to £951 for one child and £1,630 for two or more children.

Prepayment meters

From 1 July, prepayment meter customers will pay less for energy, as the Energy Price Guarantee will be adjusted so that prepay meter customers pay no more for energy than those who pay by direct debit. 

As a result, prepay households will save an average of £45 a year on their energy bills.

Tax

The personal income tax allowance will increase from £12,570 to £13,000, meaning individuals will be able to earn more before they start paying income tax.

The National Insurance Contribution (NIC) threshold will rise from £9,568 to £9,880, providing a tax cut for those on lower incomes.

Healthcare

The NHS will receive an additional £6 billion in funding, which will be used to tackle waiting lists and improve mental health services.

Education

Education spending will increase by £5 billion, with a focus on school catch-up programmes and vocational training.

Affordable housing

The government will invest £2 billion in affordable housing projects across the country.

Transport

The government will invest £15 billion in improving the UK’s transport infrastructure, including new roads, rail links and cycling infrastructure.

In conclusion…

Overall, the Chancellor’s budget was focused on providing support for key areas such as the NHS and education, while also investing in the UK’s future through green initiatives and technological development. 

While some may criticise the tax cuts for higher earners, the government argues that these measures are necessary to stimulate economic growth and job creation. Only time will tell whether these measures will have the desired effect but it is reassuring to see the government is taking steps to tackle some of the most pressing issues facing the UK today.

If you are experiencing financial difficulties, one of our small loans or savings accounts and Money & Budgeting advice service could help you become more financially stable.