Martin Lewis reveals his Budget 2023 verdict – check if you’ll be worse off
CONSUMER champion Martin Lewis has offered his verdict following the Government’s Spring Budget today.
Speaking in the House of Commons, Chancellor Jeremy Hunt laid out his plans for the economy.
Seven major changes were announced for childcare, while it was revealed the price of a packet of cigarettes will rise to £14.39 from 6pm tonight.
Meanwhile, it was announced drivers won’t pay more for fuel as duty was frozen.
Money saving expert Martin has since given his verdict on the Government’s announcements.
Here it was he thought.
Tax
Martin said while there wasn’t much mention of tax in today’s budget, the topic was still important.
The Government didn’t make any announcements today but millions will pay more in the coming years.
In November, the Government announced a freeze on income tax thresholds until the 2027/28 tax year.
But because of inflation, the tax man could still bring in extra money by what’s known as “fiscal drag”.
This is when people’s incomes rise, potentially dragging them in to a higher threshold which will see them having to start pay tax.
As an example, someone earning £12,500 seeing a pay rise to £13,000 will start having to pay 20% on anything from £12,571 or over.
And those on the basic rate tax band might be pulled into the higher rate tax band.
Read more about how you can be affected.
Energy bills
The Government has extended the energy price guarantee to July.
It means millions of households won’t see their bills go up in April.
But, Martin said millions could pay more from April despite the announcement from the Government.
That’s because the last monthly instalment of the £400 energy rebate is being paid this month.
He added the end of the rebate will have a bigger proportional impact on households who pay less for their energy.
The consumer champion went on to explain that prepayment meter customers could end up paying more for their energy later this year compared to those paying by direct debit.
He said that once fixed tariffs come back they tend not to be offered to prepayment meter customers, who from July 1 will pay roughly the same as direct debit customers for their energy.
He added those on direct debit tariffs might get offered cheaper tariffs and more choice compared to those on prepayment meters.
Pensions
Martin said the “most interesting” change to pensions wasn’t actually mentioned during Chancellor Hunt’s speech.
But it was included in Budget documents.
Spring Budget at a glance
- Millions of households will save £160 after the Energy Price guarantee was extended
- Cigarette prices will rise after the government hiked tobacco tax
- Drivers won’t pay more for fuel as duty was frozen and a 5p cut will continue in a huge win for The Sun’s campaign to keep it low
- The lifetime allowance on pensions will be axed and the annual allowance will increase
- The government will give councils £500m to fix potholes
- Millions of energy customers on prepayment meters will no longer pay more
- Jeremy Hunt unveiled 12 low-tax investment zones across the country
- Alcohol duty on beer in pubs will be cut, saving 11p per pint – but tax on wine and spirits will increase
- The Chancellor confirmed that benefits will rise next month
- Corporation tax will rise to 25% next month
- The government will extend free childcare to 30 hours for one and two-year-olds
- Working parents on Universal Credit will get more for childcare and costs covered straight away
It is that the Money Purchase Annual Allowance (MPAA) is going up from £4,000 a year to £10,000 a year from April 6.
This is the amount you’re able to put into your pension once you’ve already taken some from it.
Free cash
Martin said another thing hidden in Budget documents was that the Help to Save scheme will be extended.
It was due to end in September but will last until April 2025.
The Help to Save scheme pays you bonus money on top of any you stash away.
Savers get a 50p bonus for every £1 they put into their account over four years.
You can save between £1 and £50 a month.
If you put the maximum amount in over those four years, you can end up to £1,200 in free cash by the end.