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A Simple Guide To The Budget And How It Affects You

A Simple Guide To The Budget And How It Affects You

A Simple Guide To The Budget And How It Affects You

Having had around 24 hours to wrap our minds around it, here's a simplified guide to George Osborne's great big budget massacre and how it's going to potentially affect us all. Rich and poor alike. Although let's face it, if you're in the former category you won't fare too badly.

I'm a student - am I going to have more debt?

You'll wish you hadn't asked. Not only will tuition fees stay the same, maintenance grants are going to be scrapped - meaning that students who can't afford their living costs now will soon be expected to borrow money to help them through. This means that poorer students could be leaving university with over £50,000 of debt.

Not only that, but top unis will be able to increase their fee cap with inflation - meaning you may end up paying more than the current £9,000. Better start selling your books.

When will I have to start paying off my student loan?

As soon as you earn £21,000 or more. The figure is frozen for the next five years, so will actually fall by about 12% due to inflation over that time.

Will I notice the effects straight away?

In terms of cuts, most likely not - there will be a £12 billion reduction in welfare spending, but the targets have been put back another year until 2018.

Better enjoy the next few months then, because winter is coming.

Me and my partner are on benefits. Will there be any change for us?

Five years ago you might have been looking at about £28,300 per year. It's £26,000 now, but don't get too comfortable - in five years it'll be £20,000.

I earn £40,000 a year - does my tax rate change?

Lucky you. The higher tax bracket has been boosted up to £43,000 meaning that if you earn less than that you'll no longer be paying as much as before.

I work in the public sector. How does it affect me?

Public sector wage rises are frozen at 1% per year, so in real time terms you could be facing almost a decade's worth of cuts as your wages won't rise with inflation.

But it's not all about the money, right?

I earn minimum wage, what about me?

Some good news here: the national living wage, which will be set at £7.20 next year and will rise to £9 by 2020.

What's that? You're under 25? Oh, not for you then. At least you've still got your youth.

I'm painfully rich and I want to give my kids some money. Can I?

Yes - and tax free! Between you and your spouse you can pass on up to £1 million, so as long as you don't go over that then it's all peachy.

My third kid is on the way. What does it mean for me?

Three's a crowd, apparently. As of April 2017, families with a third child will not be receiving any more support via tax credits or housing benefits.

Will my huge corporation still have to pay 20% tax on its profits?

Goodness no. It'll fall to 18% by 2020 - not like the pesky 28% it was at in 2010.

Is it going to make my life worse?

Probably. Unless you're rich.