MILLIONS of low income workers are among the winners of this year’s Budget, while smokers and those on benefits are set to lose out.
The Chancellor couldn’t please everyone in his 2021 Autumn Budget, and while low income earners will enjoy a pay rise and drives will see a fuel duty increase scrapped, others are set to lose out.
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Rishi Sunak today delivered his second Budget of the year, making his speech to the House of Commons to outline the Government’s spending plans.
The Budget covers everything to do with the nation’s finances including tax changes for the coming year.
And with a huge post-pandemic bill to pay, many people were braced for bad news.
Here we round up who are the winners and losers from this year’s Budget.
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Winners
Universal Credit Claimants
The taper rate is to be slashed by 8% in a spectacular victory for The Sun’s Make Universal Credit Work campaign.
The surprise announcement will mean 1.7 million workers will be able to keep an extra £1,000 a year of their earnings, on average.
The work allowance is also set to rise by £500.
And the Chancellor has promised the changes will come into effect no later than December.
Mr Sunak said he wanted to “make sure work pays” and said a single mum of two living in a rented home and working full-time on minimum wage would now be £1,200 better off.
The harsh taper rate effectively taxes Brits 63p in the pound on anything they earn over their base level of benefits. It effectively discourages claimants from working more hours.
Drinkers
The price of a pint is set to come down as the Chancellor revealed he would be cutting duty on English beer and wine.
Rishi Sunak has confirmed an overhaul of taxation on alcohol, branding the duty of 28% on sparkling wines as “irrational”.
He announced a new Draught Relief on drinks served from draught containers over 40 litres.
Mr Sunak said the move would mean a permanent cut in the cost of a pint of 3p.
A planned increase in duty on spirits has also been cancelled – a tax cut of £3 billion.
It is hoped the move will help to breathe life into the UK’s struggling pubs industry, as a time when more than 1,000 pubs closed in the first half of the year alone.
Drivers
Motorists were dealt a lifeline as a planned increase in fuel duty was scrapped today.
The victory for The Sun’s Keep it Down campaign comes as petrol prices this week reached a record high of £1.42.
Rishi Sunak has ditched a 2.84p hike in fuel duty that would have added £1.57 to the price of filling up the average car.
The levy had been due to increase from 57.95p to 60.79p a litre and would have cost drivers an extra £66 a year per car.
Mr Sunak said that compared to pre-2010 plans, today’s freeze means the average tank of fuel will cost around £15 less per cars and £30 less for vans.
The 12 consecutive years of frozen rates means the average car driver has saved a total of £1,900.
Low paid workers
Workers earning the minimum wage were among those to be given some good news in the Budget.
The minimum wage will be increased from its current rate of £8.91 an hour to £9.50.
That’s an extra 59p an hour in the pocket of millions of workers – equivalent to an annual pay rise of just over £1,000 if you work 35 hours a week.
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The increase works out at £20.65 a week for minimum wage earners – roughly the same amount that Universal Credit claimants have lost since the end of the uplift.
It has been predicted that another rise could see minimum wage reach as much as £10.50 an hour by the next General Election.
Public sector workers
The Chancellor today announced an end to the pay freeze for 2.6 million public sector workers, putting them in line for a potential wage increase.
These workers have endured a pay freeze as a “temporary pause” was introduced last November during the pandemic.
The Chancellor said at the time, he could not justify across-the-board wage increases when so many private sector workers had lost their jobs or seen their hours cut during the Covid crisis.
Nurses, teachers and police officers are among those set to benefit from the announcement.
Retail and hospitality businesses
Some business owners will see their rates halved in a measure announced today.
A 50% business rate discount will be given to businesses in the retail, hospitality and leisure sectors.
These are the industries which were hardest hit by the Covid pandemic, with many forced to shut their doors for months.
Pubs, music venues, cinemas, restaurants, hotels, theatres and gyms will all be handed the lifeline.
Eligible businesses will be able to claim a discount on their bills of 50%, up to a maximum of £110,000.
Mr Sunak said that this move, together with Small Business Rates Relief, will mean more than 90% of businesses in these industries will enjoy a discount of at least 50%.
Losers
Smokers
Smokers will be hit in the pocket once more as the price of a pack of fags is set to increase.
The price of a 20-pack will soar by 88p under the latest increase, with the extra levy coming into effect from 6pm tonight.
The most expensive 20-packs will now cost £13.60.
The cheapest packs will see their price increase 63p to £9.73.
Cigarettes are often in the firing line on Budget day as part of the Government’s ongoing war against smoking.
Hand-rolled tobacco is also affected, with 89p added to the price of a 30g bag, bringing the average cost to £9.02.
Workers paying National Insurance
While low income workers will see minimum wage increase, a rise in National Insurance could cost other people hundreds of pounds a year.
The Chancellor today confirmed a controversial 1.25% hike in National Insurance, after The Sun first revealed the plans were being mooted in July.
The tax is paid on your earnings over a certain amount, and how much the move will affect you depends on your salary.
Someone earning £15,000 a year currently pays £652 in National Insurance Contributions, while those earning £25,000 pay £1,852.
Under the increase, those earning £10,000 will pay an extra £5 a year, and those earning £25,000 will pay £193 more.
Experts have warned the rise will hit lower earners harder.
Savers
The Chancellor hinted heavily that interest rates could be set to rise in the near future, which could help savers who are battling against rising inflation and rock bottom rates.
But there was no increase to any savings allowances in the Budget to encourage households to set more money aside.
The adult Isa allowance has stayed the same for the fourth year in a row at £20,000.
It was increased to this level in April 2017.
Meanwhile, the Junior Isa allowance has also remained static at £9,000.
It was almost doubled to this level in April 2020.
Pensioners
Those saving for retirement were dealt a blow as the annual and lifetime allowances were frozen again.
The annual allowance is how much you can save into your pension each year tax-free.
The lifetime allowance is the maximum value your pension pot can reach before being subject to hefty tax charges.
It is frozen at just over £1million.
It sounds a lot but many people with final salary schemes in professions such as teacher or doctor are at risk of breaching it.
If the allowance does not increase in line with inflation it effectively means people can save less in real terms each year.
There was further cause for concern as the government did not announce a date that the pension triple lock would return.
The triple lock usually guarantees that the state pension will increase by the highest of inflation, average earnings growth, or 2.5%.
But the earnings component was scrapped after the pandemic pushed earnings growth artificially higher as workers return from furlough.
Long haul travellers
Long haul holidays are set to get more expensive as the Chancellor announced a rise in Air Passenger Duty (APD).
A new APD band will cost £91 in tax for seats in Economy on flights of over 5,500 miles.
It’s a £7 increase on the current rate.
Mr Sunak said the tax was about reducing carbon emissions from aviation and would affect fewer than 5% of passengers.
He added: “Those who fly furthest will pay the most.”
It means those holidaying to the likes of Australia, South Africa or Singapore will all see the price of their flights go up.
APD will, however, be cut by 50 per cent on flights between England, Scotland, Wales and Northern Ireland.
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