RISHI Sunak revealed a number of measures aimed at helping struggling households – here are the winners and losers.
The Chancellor’s Spring Statement brought some surprising announcements – and some not-so-surprising ones. But how will they affect you?
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Low income workers, people on benefits and universal credit, homeowners, and drivers were all covered in today’s Spring Statement.
The Chancellor announced a string of changes to help families including:
But not everyone has come out of it better off.
Here are all the winners and losers from the Spring Statement.
Winners
Drivers
The Chancellor has cut fuel duty for the first time since 2010, slashing the cost of filling up a typical family car by £3.30 a time.
Fuel duty currently makes up 57.95p of every litre of fuel you buy, but from 6pm tonight that will be slashed by 5p.
The cut will remain in place until March next year, saving the average car driver £100 in that time and the average van driver £200.
But motorists are still facing record prices at pumps as the average cost of a litre of petrol now costing 167.3p and diesel 179.7p, according to the RAC.
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With the average price of filling up a family car now £100, the fuel duty will do little to ease the squeeze, and critics say the Chancellor should have gone much further.
Some pointed out that there was also no guarantee that fuel retailers will pass the saving on to motorists.
Sainsbury’s and Asda have, however, vowed to cut pump prices by 6p a litre from tonight.
John Wilmot, chief executive at car leasing site LeaseLoco, said: “Families will feel hugely let down by the Chancellor’s response to the current fuel crisis.
“Let’s be honest, this cut in duty will barely register at the pumps when many car owners have seen the cost of filling up a tank rise by £20-£40 over the past few weeks.”
Motorists on social media said the cut did little to offset soaring petrol prices.
One sarcastic Twitter said: “I’m so glad my petrol will drop by 5p even thought it’s risen by 30p in two weeks.”
Another tweeted: “Not sure cutting 5p off a litre of petrol is going to make much difference when gas and electric is going up by over 50% next month.”
Workers
Low-earners were at the top of the agenda in the Spring Statement, and a number of measures should help them keep more of their hard-earned cash.
Rishi stopped short of scrapped an increase to National Insurance Contributions, which comes into effect next month – but a major change to NICs means fewer people will pay the tax.
Currently, you start paying NICs on your earnings above £9,500.
But this threshold will be raised to £12,500 from July – saving some workers up to £330 a year in tax.
The Chancellor said it was “a £6bn personal tax cut for 30m people across the UK” and “the largest single personal tax cut in a decade”.
Meanwhile, the basic rate of income tax will be cut from 20% to 19% – but workers will have to wait two years before this kicks in.
And millions of workers are set to get a £1,000 a year pay rise from next month, when minimum wage is increased.
The National Living Wage is paid to workers over 23 years old – it is currently £8.91 but will rise to £9.50 from April.
Low income households
The Chancellor revealed that the Household Support Fund will be DOUBLED to £1billion, providing more help for struggling households.
The scheme was launched in October with £500million dished out to local councils to help people in their area.
They offer free cash or vouchers to pay for things including energy bills, groceries and other essentials.
You can find your local authority using the Government’s website, and check what help is available in your area and whether you’re eligible.
Experts said the £500million extra funding would be good for struggling Brits – but questioned whether it would go far enough.
StepChange chief executive Phil Andrew said: “The additional £500 million to the household support fund is of course welcome, but a drop in the ocean in terms of addressing the scale of need among the most financially vulnerable households in the light of the dramatic rise in the cost of living.”
The HSF scheme has been criticised since it was launched – because local councils are able to decide what form of help to give and who is eligible, some vulnerable families may not get anything.
Laura Suter, head of personal finance at AJ Bell, said: “This will frustrate lots of people who called for more direct and automatic support for households.
“Allocating the cash to local councils means people have to be aware that help is available and actively apply, rather than the money being handed to those who would benefit the most.”
Losers
People on universal credit and benefits
Many people had hoped that the Chancellor would use the Spring Statement to reduce the Universal Credit taper rate again.
The Universal Credit taper rate affects those claiming the benefit who are also working but are on low incomes.
In October’s Budget, Rishi slashed 8p from the rate, effectively giving those on benefits a £1,000 a year boost.
The taper is currently set at 55p for every pound that Brits on the flagship benefits system earn over their work allowance – but The Sun has long campaigned for this to be reduced to 50p.
But there was no announcement for those on Universal Credit today, unfortunately.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The lower your income, the bigger the percentage of it you spend on essentials, and the harder it is to cut costs when prices rise.
“Those on Universal Credit have a nightmare trying to make ends meet as prices rise through the roof and benefits are set to rise just 3.1%.
Those on benefits may also have been disappointed that there was no uplift to rates announced.
Payments are going up by 3.1% next month, but this is far below inflation – which today clocked in at 6.2% – meaning those on benefits will see a fall in their income in real terms from next week.
Pensioners
Retirees were left out of the Budget today, despite the fact that many are feeling the pinch from the cost of living squeeze.
The State Pension goes up in April, but only by 3.1% – meaning that pensioners will also be getting a real terms pay cut.
The maximum new state pension amount will rise from £179.60 a week to £185.15 in April – an extra £289 a year.
The annual rise is usually calculated according to what is known as the triple lock.
But because of the coronavirus pandemic that has temporarily changed and the rise is fixed by the double lock instead.
Steven Cameron, pensions director at Aegon, said: “Pensioners received little in the way of good news from the Chancellor in his mini-Budget.
“There was nothing new in the way of temporary support specifically for this group, and no improvement on the 3.1% increase in the state pension from next month, which is just half the current rate of inflation.
“One possible help could have been to offer a bigger increase to the state pension this April in return for a lower rise next April.”
Retirees could fare better next year after work and pensions secretary Therese Coffey confirmed the triple lock will be back in 2023.
That could mean an increase of £770 to State Pension next year – but many retirees may struggle to get through this year first.
Everyone
Millions of households hoping the Chancellor would step in to provide more help with energy bills were left disappointed today.
Last month, Rishi announced households would get a £150 council tax rebate and £200 energy bill refund to help them manage crippling bills.
But critics have said the government did not go far enough, and many families are on the brink.
People took to social media to berate the Chancellor for his lack of help.
One tweet read: “Sunak’s spring statement does absolutely nothing for me. He is boasting that some households will receive £300 per year, yet my energy bill alone has gone up by £700, food prices are soaring and inflation will drive up mortgage payments and loans.”
Another said: “Rishi Sunak has done nothing for everyone facing a 50% rise in energy bills.”
If you are worried about your bills, we have rounded up all the help you can get including hardship schemes and grants.
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