The UK Budget 2021: How does it affect me?

Earlier today, Rishi Sunak, Chancellor of the Exchequer, announced the UK Budget for 2021, but what does this mean for you and me?

Perhaps you didn't watch the announcement or were lost in all the jargon, fret not as we’ve done the hard work for you. Here are some of our key takeaways from the Budget announcement and how they may affect us:

How does the Budget affect us?

Continued support

The government will continue to support those in employment and self-employed.

• The National Living Wage will rise to £8.91 from April this year, an increase from £8.72.

• The furlough scheme will be extended until September this year, helping companies to keep their employees and continue supporting 80% of their salary.

• From next month, those self-employed will be able to claim their fourth income support grant, which is calculated at 80% of 3 months’ average trading profits based on the previous financial year. This will also now include those who were self-employed and filed a tax return 2019-20.

• Extra £20 a week on Universal Credit will be extended for another 6 months.

Reopening the economy

As the UK emerges from lockdown, the government has committed to supporting businesses to get back on their feet, this includes:

• £700 million has been pledged to support the arts, culture, and sports sector to reopen once restrictions ease. 

• £5 billion will be spent on re-opening grants for non-essential businesses.

Generation Buy 

The Chancellor has pledged that they want to turn ‘Generation Rent’ into ‘Generation Buy’ and to do so they’ve pledged to continue to support first home buyers in a few ways.

• From next month, 95% mortgages will now be backed by the government meaning first-time buyers will only be required to pay a 5% deposit on properties worth up to £600,000.

• The nil-rate threshold of stamp duty will be extended until 30th June, meaning no stamp duty tax will have to be paid for the first £500,000 of a property purchase.

No changes

Good news! In order to reduce the financial strain many of us have faced due to Covid, there will be no changes on the following:

• All duties on alcohol and fuel will be frozen.

• Personal tax allowance will be frozen.

• Income tax, national insurance and VAT will remain the same.

Phew! 

For more information on the UK Budget for 2021 and the complete breakdown of the announcement, click here.