Budget 2016 – how it could affect you
The Chancellor’s budget discussed changes to taxes, benefits and the economy. But how does it affect you? We’ve rounded up the main points as well as details of other changes that come in to force this month.
An increase in the price of tobacco, for both cigarettes and hand-rolled, will take effect hours after the budget is announced.
What does it mean to me? The cost of 20 cigarettes will go up by around 21p. Hand rolled tobacco will increase by 44p for 30g. From 20th May you won’t be able to buy cigarettes in packs of less than 20.
The tax on beer, cider and whisky is frozen. Duties on other alcoholic drinks will increase in line with inflation.
What does it mean to me? On average a bottle of wine will be four pence higher from the 21st March.
As prices have dropped below £1 a litre, due to falling oil prices, some expected an increase in fuel duty. The Chancellor has decided NOT to increase tax on petrol for the sixth consecutive year.
What does it mean to me? The cost to fill up your car won’t increase due to tax at the moment. However some retailers did increase the price per litre on the eve of the budget. To fill a 60 litre tank of unleaded petrol currently costs between £81-£87 across the UK (source: Fleetworld)
A sugar levy is to be introduced on soft drinks such as Coke and Pepsi. This will begin from 2018 onwards.
What does it mean to me? At the moment the plans around the levy are still being discussed. But expect to pay more on sugary drinks from 2018.
The personal allowance will increase to £11,500 from next April.
What does it mean to me? You can earn £500 more before you are taxed.
Insurance Premium Tax
IPT as it’s known will increase by 0.5%.
What does it mean to me? You’ll pay slightly more for home and car insurance.
ISA limit increased
The limit for savings in an ISA has increased. Launch of a new Lifetime ISA will give people an additional 25% on top of what they save.
What does it mean to me? This can help if you’re looking to save for a new house or retirement.
Disability Cuts / Personal Independence Payments
Changes to how people were assessed for disability living allowance were aimed at saving money. This was down to mobility and personal reviews being more harsh from 2017 onwards.
Following much publicity, and the resignation of work and pensions secretary Iain Duncan Smith, the Government decided not to go ahead with the proposed changes.
Other changes that come in to effect this month (from previous budgets)
Increase in your tax allowance
This is a change that was previously announced in 2015. The personal allowance has increased from £10,600 to £11,000 this month. So you can earn up to £11,000 tax free. Next year it will increase by a further £500.
This was announced in one of last year’s budget speeches, but starts this month. Known as the National Living Wage this will rise to £7.20 per hour. This was previously £6.70 for over 25’s.
Money Advice – announced in this year’s budget
Changes to The Pensions Advisory Service and Pension Wise will involve re-structuring of these services following the Public Financial Guidance Review. The Money Advice Service is set to be abolished.
If you’re currently worried about your finances, have unsecured debts from personal borrowing and would like to speak confidentially to an advisor who can talk to you about the benefits and considerations of a range of debt solutions and personal insolvency solutions, then please get in touch by calling 0800 048 1764. You can also visit www.harringtonbrooks.co.uk to request a call back at a time to suit you. By requesting a call, you are under no obligation to use our services. Harrington Brooks provide solutions to customers living in England, Scotland and Wales.
Should you choose to undertake a plan or arrangement, there may be consequences to consider, including restrictions on future expenditure, lending and on your ability to obtain further or future credit. Fees, terms and conditions apply. For further information and advice please visit www.harringtonbrooks.co.uk.
The services that we provide may be available at no cost from other government and charity based providers.
Further information can be obtained from the Money Advice Service at https://www.moneyadviceservice.org.uk/en/articles/where-to-go-to-get-free-debt-advice