UK autumn statement 2016 and savings bond highlights
In case you missed the autumn budget statement 2016 today,here are the highlights for you and what it means to you.The areas which drew the most interests are housing benefits,child care,tax,fuel duty and letting agent fees.
The Brexit vote as expected has played a big part in the economy.This has led toGrowth being reduced 2.4% lower than it would have been had it not been for the controversial vote.But GDP is expected to do better than earlier forcasted,an increase by 2.1%,an earlier forecast of 2% was expected.However growth is expected to be down in 2018 but recover in the following years.
For the seventh year running,Fuel duty will be frozen .This will save the average car driver £130 and the average van driver £350 a year.
But it's not all good news for drivers as insurance is set to rise as the Insurance Premium Tax will rise from 10% to 12% in June 2017.The insurance hike is expected to spread through to the price of home cover and other insurance products.Understandably,insurance companies are not happy about this and have expressed their anger saying that this is the third rise in this tax in 18 months.
Housing i'm afraid does not bring good news for ambitious first time house owners.Chancellor Phil Hammond confirmed that for many,home ownership remains out of reach.With recent official figures stating that a typical home in Britain costs £218,000.First-time buyers would need to find an average deposit of about £33,000 for a mortgage on such a property.This is a rise of £16,000 from 2015.
Hammond however committed to increase funding for home building, £2.3bn Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in high demand areas has been made available while £1.4bn is set aside towards the construction of affordable homes.
Good news though for those renting.For the seventh year in a row,there will be no letting agent fees.The agencies in England are banned from charging upfront fees to tenants.
These fees can cost hundreds of pounds and include charges for references, to secure a tenancy, and even a deposit for those wishing to have a pet.
The cost will be shifted to landlords, as is the case in Scotland. The argument is that they have the power to shop around for the cheapest agent when letting out their property.
It is good news for those aged 25 and above regarding the National Living Wage.It goes from £7.20 to £7.50 in April.
The benefits systems sees some major changes too.The chancellor announced that no more welfare cuts would be announced during this Parliament - but that a cap on welfare spending would remain.
You do recall that main working age benefits and tax credits were frozen in cash terms for four years from April 2016. That includes entitlements such as job seeker's allowance and income support. That income freeze could coincide with an acceleration in inflation, pushing up the cost of living and adding pressure to those on low incomes.Welfare spending previously was way higher than intended,but now stability has been maintained and there will be no further savings in this Parliament beyond those previously announced.
If you are one of those who buys and sells on a small scale,this might make you happy. A new tax relief to help those who buy and sell on a small scale, such as on internet auction sites or at car boot sales is being introduced by the government. From April 2017, the first £1,000 a year of income will not be taxable.
This relief will also extend to the first £1,000 of property income, such as from letting your room via a website.
Autumn statement tax changes- Tax-free personal allowance will rise to £11,500 from April and by the end of the parliament will rise to £12,500.
Employers and employees using "salary sacrifice" schemes will from April 2017, pay the same tax as anyone else.
The Government are going ahead with their plan to cut corporation tax from 20% to 17% and insurance premium tax will rise from 10% to 12%.