You are here: Home - Household Bills - News - Understanding -

BUDGET 2017: Personal allowance and minimum wage to rise next year

Written by: Paloma Kubiak
The personal allowance and minimum wage rates will rise from April 2018, the Chancellor of the Exchequer announced in the Budget today.

The personal allowance – the amount of money you can earn before you start paying income tax – will rise with inflation from the current level of £11,500 to £11,850 from April 2018.

Philip Hammond said this means that in the 2018/19 tax year, a typical taxpayer will pay around £1,075 less than in the 2010/11 tax year.

However, in the Spring Budget earlier this year, the Chancellor already committed to raising the personal allowance to £12,500 by 2020.

For higher rate taxpayers, the threshold will rise from £45,000 to £46,350 in April 2018, though the government has already committed to raising the higher rate threshold to £50,000 by 2020.

Minimum wage rise

Hammond said that unemployment in the UK stands at 1.4 million which is “1.4 million too many” and while the proportion of full-time jobs that are low paid is at its lowest level for 20 years, he committed to raising minimum wage rates.

The National Living Wage (NLW) was launched in April 2016 for all working people aged 25 and over.

The rate currently stands at £7.50 an hour, but the Chancellor announced that this will rise 4.4% to £7.83 from April, benefitting over two million people. This move will add £600 to annual incomes for full-time workers.

Turning to the National Minimum Wage (NMW) for those aged under 25, Hammond committed the following wage rises from April 2018:

  • 21-24-year-olds: £7.38 per hour (up from £7.05 per hour)
  • 18-20-year-olds: £5.90 per hour (up from £5.60 per hour)
  • 16 and 17-year-olds: £4.20 per hour (up from £4.05 per hour)
  • Apprentices (aged under 19 or in the first year of their apprenticeship): £3.70 per hour (up from £3.50 per hour).

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
buying a house
BUDGET 2017: Stamp duty slashed for first-time buyers

Chancellor Philip Hammond has unveiled a cut in Stamp Duty Land Tax (SDLT) for first-time buyers, effective immediately.