Household Bills
Budget 2020: what to expect
Chancellor Sajid Javid has confirmed he will deliver his first Budget on Wednesday 11 March. What is he likely to announce?
National insurance
During the election campaign, Boris Johnson pledged to raise the National Insurance threshold first to £9,500 from the current £8,632 and then to £12,500. This plan, which would save around 31 million lower paid workers around £100 a year, could be confirmed in the Budget.
National Living Wage
The Chancellor could also confirm an increase to the National Living Wage (NLW) to £10.50 an hour from 2024. The government has already announced the NLW will increase from £8.21 to £8.72 an hour from April 2020.
Pensioner perks
Javid is expected to commit to several pensioner benefits including the winter fuel payment, the older person’s bus pass and the triple lock increase on the state pension.
During the election campaign, Johnson hinted at scrapping the TV licence fee and said the BBC should fund licences for over 75s after it announced free licences for this group would be abolished from June 2020.
Annual allowance taper
On the pensions front, the chancellor could announce changes to the annual allowance taper, which has negatively impacted some high-earning workers in the NHS.
The problems stem from changes to the amount people can put into their pension tax-free.
The annual limit was in excess of £250,000 as recently as 2010/11, but it has been cut dramatically and now stands at just £40,000.
For higher earners an additional ‘taper’ brings the allowance down further to just £10,000 for individuals with total earnings of £210,000 or more.
The policy change has created strain in key services including the NHS, where senior clinicians are facing huge tax bills if they and their employer pay into a pension above the tapered annual allowance. Some key workers, most notably doctors in the NHS pension scheme, have chosen to turn down work and overtime, rather than risking a retrospective pension tax charge.
In its manifesto, the Conservative Party promised a review of the problem ‘within the first 30 days’.
Support for home buyers
The government has pledged to support home ownership so there could be announcements around plans to offer local people and key workers a 30% discount when buying a home, which would be funded by developers.
