Chancellor Rishi Sunak Delivers Budget as Prices Soar

BUDGET - Please see this budget summary below. 

James Andrews, Senior Personal Finance Editor at money.co.uk, said: “Rishi Sunak handed a tax cut worth £330 to millions of Britons today - with the promise of more to come.

“He also announced plans to help with rising bills - cutting fuel duty 5p a litre from tonight as well as removing VAT for energy efficient home improvements and adding more money to the fund councils have to help people struggling with energy bills.

“But with bills still set to soar in April and petrol and diesel prices well ahead of last year even after the cut, that doesn’t mean you can relax and should make sure you’re getting all the help available to you.

“Your first line of financial support is Universal Credit, a monthly allowance from the government, to help you cover basic necessities like food, rent and bills. If you are over the age of 18, unemployed, or on low income, you can apply for Universal Credit through the government website.

“You can also claim an additional allowance if you have children. Most people can receive support for their first two children, although there are some circumstances where you can claim for three or more. It’s worth checking your eligibility on the government website.

“If you have children but earn too much to claim Universal Credit, the next most common scheme of financial support is Child Benefit. This usually works as a monthly allowance, equaling around £21.42 a week for your first child, and an additional £14 a week for each child after. 

“When it comes to parenting, another huge financial burden for many is affording childcare payments - especially in the current financial climate. The good news is that the government has multiple schemes in place to ease the burden.

“Anyone who has children aged three or four is entitled to 15 hours free childcare, regardless of your employment status. If you’re currently employed, this increases to 30 free hours a week.

“You can also apply for 15 hours free childcare if you have a two-year-old, however, you will only be eligible if you’re already receiving another government benefit like Universal Credit. You can check your eligibility for all free childcare on the government website.

“Parents should also be aware of free school meals. In England, all children in state school are entitled to free school meals in reception and Years one and two. If you live in Scotland, all children are entitled to free school meals up to year 5 in state schools.

“Beyond this, if you’re receiving Universal Credit, or another benefit including Income Support and Child Tax credit, you can claim free school meals for your child from year 3 up, right until they finish school.

“When it comes to paying your bills, it’s really important that they are paid on time. Late bill payments often incur fees and negatively affect your credit score. One easy way of ensuring your bills are paid on time is by setting up a direct debit.

“It’s also important to prioritise your bills to ensure the most important are paid off first. This way, you can tick off bills like mortgage payments or rent that could see you lose your home above unsecured loans such as credit cards. 

“With millions struggling financially, it’s understandable that many will turn to using credit cards to make payments. These can work in your favour, as credit cards allow you to spread thousands of pounds of purchases over more than a year - often interest free for the first few months. However, if you don’t clear your debt on time, interest quickly starts to build up - especially if you’re only making the minimum payment each month. 

“If you are dealing with mountains of credit card debt, you may want to move this existing debt to a 0% balance transfer card. Shifting your debt to a 0% card means that you will not be charged any new interest for a set period. Just make sure you have a plan to clear that debt before the 0% period runs out though, or you’ll just end up back where you started.

“However, before you do this, it’s important to think carefully about whether you can set a sensible budget for paying off your balance within the 0% period, otherwise you’re only adding to your problems.  

“If you fail to pay your bills then you may be fined, while more serious cases can result in your service being rescinded and your provider employing a debt collecting agency to chase payment. It’s also worth remembering that this will negatively affect your credit rating. 

“Outstanding debts can feel like a huge weight, affecting your relationships, mental health and threatening your financial security, but the worst thing you can do is try and tackle this on your own.

“If you’re really struggling and need short-term support, you can get independent advice from several specialist services. StepChange is a charity that provides advice and help on budget and debt management. Similarly, Citizens Advice and National Debtline offer free, confidential advice to people facing debt problems in the UK. 

“The most important thing to remember is that you shouldn’t have to suffer on your own. Help is always available - just ask.”

For a full recap of the Spring Statement, visit https://www.money.co.uk/guides/spring-statement-2022

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