3rd November 2021

Now that the 2021 Autumn Budget has been announced, we take a look at the impact it could have on our members. On Wednesday, October 27th, Rishi Sunak, the Chancellor of the Exchequer, unveiled his Budget for autumn 2021. So what did it include and what does it all mean for our members?

 

Pay

From April 1st 2022, the National Living Wage will rise from £8.91 an hour to £9.50, leaving those in full-time employment an extra £1,000 per year better off. The National Minimum Wage will also increase to £9.18 per hour for younger workers and £4.81 for apprentices.

Members of the armed forces, nurses and teachers will also receive a pay rise when a pay freeze is lifted in April.

 

Affordable housing

Good news for first-time buyers – the government has committed £24 billion to a multi-year housing settlement, with £11.5 billion of funding going towards building new affordable homes.

 

Fuel duty 

Good news for motorists too, as fuel duty has been frozen at 57.95p per litre, a move that is predicted to save drivers an average of £1,900 over the next five years. With pump prices at an eight-year high, it’s hard to imagine anyone complaining.

 

Schools and education

Among a raft of new measures are:

  • an extra £4.7 billion for schools by 2024/25
  • nearly £2 billion of new funding to help colleges and schools recover from the pandemic
  • the launch of a new Start for Life scheme to support families, perinatal mental health services, and parenting programmes
  • a pay rise for childcare providers

 

 

Healthcare

An additional £44 billion has been made available to increase healthcare spending by May 2024. While the details are a little vague, extra investment in the NHS should make getting GP appointments easier and help hospitals deal with ever-lengthening waiting lists.

 

Transport

With the state of the UK’s roads coming in for regular criticism, £2.6 billion has been committed for more than 50 local road upgrades and more than £5 billion has been put aside for road maintenance – enough to fill approximately one million more potholes per year.

 

Universal Credit 

The Universal Credit taper rate – the amount of Universal Credit (UC) withdrawn for every pound someone earns – will be cut from 63p to 55p by December 1st.

While this could be worth more than £2 billion to those claiming Universal Credit overall, it’s worth noting that the £20 per week increase to UC payments that was introduced at the start of the coronavirus pandemic has now been withdrawn. Whether or not the reduction to the UC taper rate will fill that gap remains to be seen. 

 

What now?

While the Budget contains some good news for households, it is too soon to tell how much of an impact it will have on families. This is because the prices of many goods and services are still rising and, as a result, the Bank of England is expected to announce an increase to its key interest rate in November. If this happens, it will affect the amount the public sector receives after the pay freeze ends and could also negatively impact the increase to the National Living Wage.

 

Consequently, now is not the time to make drastic changes to your spending habits. Instead, we would recommend our members continue to be as careful as possible with their money while the financial impact of the pandemic is still evolving.

 

If you think you would benefit from one of our loans or savings accounts, you can find out more about our services and charges here.

Written by
racheldowning

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