MARTIN Lewis has demanded four big changes be made in the Spring Budget, including an “unfair penalty” for parents and Lifetime Isa changes.
The Money Saving Expert (MSE) founder has written to Jeremy Hunt outlining the key changes he wants to see.
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The Budget is when the Government outlines its plans for tax hikes, cuts and things like changes to Universal Credit and the minimum wage
It will take place at around midday on Wednesday, March 6.
In a recent episode of his ITV Money Show, Martin interviewed the Chancellor on a wide range of issues, including mobile and broadband bill hikes.
He has now followed this up with a letter emphasising the four areas where he wants to see change.
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It’s important to bear in mind that just because Martin has called for these changes, it’s not a guarantee that they will be made.
But Jeremy Hunt has hinted that households could be in line for more tax cuts in his budget.
Lifetime Isa changes
Lifetime ISAs are often used by first-time buyers to get on the property ladder.
But the home must cost less than £450,000 – a threshold that has remained the same since 2017 despite rising house prices.
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If savers use the money to buy a property that is over the scheme’s £450,000 limit they face a 6.25% withdrawal penalty.
This means that someone who has saved £20k could face only getting back £18,750 of their money if they choose to take it out.
The consumer champion recently brought up the issue of the savings account charges with Chancellor Jeremy Hunt.
In the letter, Martin wrote: “The penalty was imposed to stop LISAs being used for unintended reasons – people are now being fined for using those LISAs on exactly what they were intended for.”
In response to Martins’s comments about the Lifetime ISA penalty, the Chancellor said: “I’ve now started to make my plans for the Budget, which is on 6 March, and I absolutely hear what you say on that.
“And, you know, consider the Chancellor properly lobbied on that point.”
Martin also urged anyone aged 18 to 39 who doesn’t own a home to put £1 into a Lifetime ISA.
He said: “To use a Lifetime ISA as a first-time buyer the product has to have been open for a year.”
The money guru said you don’t need to put any more than that in initially but it is good to “get the clock ticking” on the account for the future.
Meanwhile, The Sun has put together a guide to all of first-time buyer schemes where you don’t need a deposit or just 1%.
Changes to broadband and mobile price hikes
Martin Lewis has repeatedly called for above inflation mid-contract hikes to be banned.
Speaking on his show, Martin told The Chancellor: “Broadband and mobile firms, in the middle of people’s contracts, are hiking prices 3% to 4% above inflation.
“It meant last year rises of 17%. My guess, you don’t have to say whether or not, is this year it will be 7% coming in this April.
“Hikes above inflation rises is both terrible for consumers and terrible for you because it’s inflationary.
“Why don’t we just ban them from doing that. Can you not stop that please Chancellor?”
He doubled-down on this stance in his letter to Jeremy Hunt, writing that those who are locked-in their contracts, can’t take advantage of ditching and switching.
The Chancellor said he would write to the Competition and Markets Authority, who are a body that look into these things independently of politicians.
Ofgem recently revealed that mobile and broadband providers could be banned from linking price rises to runaway inflation figures under new proposals.
For now, Ofcom will consult on this proposed new requirement until February 13 2024, and plan to publish its final decision in spring 2024.
It intends for the new rule to come into effect four months after the publication of its final decision.
BT has already said it is abandoning mid-contract price rises linked to inflation from this summer.
High Income Child Benefit charge
If either parent or carer starts earning over £50,000, they have to start paying the high income child benefit charge.
This means you have to pay back 1% of your child benefit for every £100 of income earned over the £50,000 threshold.
Once you reach £60,000 of yearly income you have to repay the full amount of child benefit received.
Parents have been caught out by the complicated rules and extra charge and landed with bills for thousands of pounds.
It’s up to parents to notify HMRC if they are liable for the charge and they must file a self-assessment tax return to pay it.
In his letter to the Chancellor, Martin said the charge “unfairly penalises single-income families”.
This is because you start to lose child benefit when one earner hits £50,000 and you lose it totally when one earner hits £60,000.
But you can have two parents earning £49,000 that won’t lost it.
There is an unfairness in the system that harshly penalises single-income families or two-parent families where one of them is a higher earner and that’s because you start to lose child benefit when one earner his £50,000, and you lose it totally when one earner hits £60,000.”
He added that it was addressed in the budget, he thinks it would be a “very popular measure”.
During an appearance on Good Morning Britain today, Martin said The Chancellor could look at moving the thresholds to reduce the number of people impacted by the charge.
He said: “What he could do that would take many people out of it is simply increase the starting threshold and move it from £50,000 to £60,000.
“While that would not fix the unfairness, it would reduce the number of people caught by the unfairness.”
Student loan changes
The living, or maintenance loan, is often the main source of cash for students at uni to cover the cost of essentials like rent.
The maintenance loan is means tested so students need to provide details of their family income as well as where they will be living while they study.
But Martin said that for most students, the loan isn’t enough to live on and is “especially detrimental” for those from low-income households.
He said this it because it has been “substantially cut in real terms”
Last year, the Government uprated student maintenance loans in England by 2.8%, while inflation was running at double digits.
This means that the uprating isn’t keeping up with the cost of living.
Martin urged the Chancellor to look at the way the loan works in the Spring Budget.
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Meanwhile, Martin Lewis has revealed how to slash monthly bills by 50% & get thousands of pounds back.
Plus, he has warned anyone with an eBay account to make check now or face being hit with shock bill.
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