On Wednesday 23 March, the government published the 2022 Spring Statement, setting out spending for the spring budget. This thread has been updated with the key financial announcements below.
Key information from the Spring Statement
National Insurance threshold raised
The Chancellor, Rishi Sunak has raised the National Insurance threshold by £3000 in a bid to help low income households — the rate at which workers start paying National Insurance will be £12,570.
The National Insurance threshold will now be in line with Income Tax from July this year.
Fuel Duty cut
Also announced was a cut in fuel duty of 5p per litre, in place until March 2023, as petrol and diesel costs continue to rise.
This will come into force at 6pm tonight (23 March).
Surprise tax cut
Mr Sunak also told MPs that the basic rate of income tax will be cut from 20p to 19p in the pound (from 20% to 19%) by the end of this Parliament - 2024. He said this equates to a £5bn tax cut for 30 million people. Those on the lowest tax bracket will benefit in 2024, but not sure how this is relevant to the cost of living crisis now.
Other announcements
Mr Sunak did not mention the scrapping or indeed delaying of the National Insurance rate, nor the Windfall tax on Energy companies.
VAT is to be scrapped for five years on all energy efficiency measures on your home, such as solar panels, heat pumps and insulation installed.
The Household Support Fund to help vulnerable families is to be doubled from £500 million to £1 billion. Local authorities are to receive the money from April.
The retail, hospitality and leisure sectors will have a 50% discount in business rates up to £110,000.
From the BBC: Three big figures for inflation, growth and debt
During his statement Chancellor Rishi Sunak referenced these eye-watering estimates from the Office for Budget Responsibility on inflation, growth and debt repayments.
Things to expect in the Spring budget 2022
Ahead of the “mini budget” Spring Statement there have already been some predictions, which are more financial updates rather than spending changes or tax amendments.
National Insurance rise
Whilst it is unlikely that this contentious tax hike will be scrapped completely, the Chancellor might consider only charging a 1.25% increase on employers and defer it for the self-employed and employees until a later date.
This means if you are full-time salaried, you will possibly no longer need to pay more National Insurance, but it still brings in billions of pounds from your employers.
Scrapping the proposed rise altogether would ease pressure on struggling families, removing some of the burden of higher-than-expected inflation.
Energy price hikes
The government has already said it will give a £150 Council Tax rebate or £200 credit per household to be paid back over five years, to help with the rise in energy bills. But Russia’s invasion of Ukraine will push energy bills higher and nullify this credit.
According to the Evening Standard, polls suggest that “one third of Britons fear they might not be able to pay gas and electric bills if they keep increasing.” There has been speculation of a windfall tax on energy companies to cap what they can charge, as seen in France, but this remains unlikely.
The announced £150 council tax rebate was a measure to help struggling families with energy bills, but is increasingly unlikely to cover the rise.
According to The Telegraph, the Government said it will also push ahead with plans to expand the eligibility criteria for the Warm Home Discount scheme, increasing the number of people who can apply by close to a third. Additionally, the value of the benefit will rise by £10 from £140 to £150 from October.
Fuel Duty
Fuel for vehicles has also seen steep rises in recent weeks, again due to the war in Ukraine. To counter this, the Chancellor could help consumers by temporarily removing VAT charged on fuel. Households spending £150 a month refilling their car, could save £25 per month, if retailers passed the entire saving to the consumer by removing VAT at point of sale.
The chancellor could also cut fuel duty by 5%, which has stood at the same rate for a decade, which would help prices stay level. However, fuel prices could increase further, as “global instability and biting sanctions on Russia continue to push up the price of crude oil” according to The Sun.
Other announcements
The Chancellor said that he and the government “recognises that inflation is rising and is closely monitoring the situation together with the Bank of England.”
And he suggested it was “putting in place policies to help families meet the rising cost of living, for example freezing duties, cutting the tax rate in universal credit and increasing the national living wage.” This rise in the national living wage was announced in the Autumn budget in 2021.
Speaking to ITVs Sunday Morning, Martin Lewis said: “As the Money Saving Expert who’s been known for this - I am virtually out of tools to help people now.
“It’s not something money management can fix. It’s not something for those in the lowest incomes, telling them to cut their bills will work. We need political intervention.”
Here's a breakdown of how the possible fuel changes will affect your household from Sky News.
Something else worth thinking about is the reduced VAT for businesses and hospitality, currently at 12.5% is also going to end on 31 March. This means that eating out, holidays, and accomodation will be charged at 20% VAT from that date — might be worth booking before the end of March.
Key information from the Spring Statement
National Insurance threshold raised
The Chancellor, Rishi Sunak has raised the National Insurance threshold by £3000 in a bid to help low income households — the rate at which workers start paying National Insurance will be £12,570.
The National Insurance threshold will now be in line with Income Tax from July this year.
Fuel Duty cut
Also announced was a cut in fuel duty of 5p per litre, in place until March 2023, as petrol and diesel costs continue to rise.
This will come into force at 6pm tonight (23 March).
Surprise tax cut
Mr Sunak also told MPs that the basic rate of income tax will be cut from 20p to 19p in the pound (from 20% to 19%) by the end of this Parliament - 2024. He said this equates to a £5bn tax cut for 30 million people. Those on the lowest tax bracket will benefit in 2024, but not sure how this is relevant to the cost of living crisis now.
Other announcements
Mr Sunak did not mention the scrapping or indeed delaying of the National Insurance rate, nor the Windfall tax on Energy companies.
VAT is to be scrapped for five years on all energy efficiency measures on your home, such as solar panels, heat pumps and insulation installed.
The Household Support Fund to help vulnerable families is to be doubled from £500 million to £1 billion. Local authorities are to receive the money from April.
The retail, hospitality and leisure sectors will have a 50% discount in business rates up to £110,000.
From the BBC: Three big figures for inflation, growth and debt
During his statement Chancellor Rishi Sunak referenced these eye-watering estimates from the Office for Budget Responsibility on inflation, growth and debt repayments.
- Inflation forecast to average 7.4% this year
- UK growth expectation downgraded to 3.8% this year
- UK to spend £83bn on debt interest in the next year
Things to expect in the Spring budget 2022
Ahead of the “mini budget” Spring Statement there have already been some predictions, which are more financial updates rather than spending changes or tax amendments.
National Insurance rise
Whilst it is unlikely that this contentious tax hike will be scrapped completely, the Chancellor might consider only charging a 1.25% increase on employers and defer it for the self-employed and employees until a later date.
This means if you are full-time salaried, you will possibly no longer need to pay more National Insurance, but it still brings in billions of pounds from your employers.
Scrapping the proposed rise altogether would ease pressure on struggling families, removing some of the burden of higher-than-expected inflation.
Energy price hikes
The government has already said it will give a £150 Council Tax rebate or £200 credit per household to be paid back over five years, to help with the rise in energy bills. But Russia’s invasion of Ukraine will push energy bills higher and nullify this credit.
According to the Evening Standard, polls suggest that “one third of Britons fear they might not be able to pay gas and electric bills if they keep increasing.” There has been speculation of a windfall tax on energy companies to cap what they can charge, as seen in France, but this remains unlikely.
The announced £150 council tax rebate was a measure to help struggling families with energy bills, but is increasingly unlikely to cover the rise.
According to The Telegraph, the Government said it will also push ahead with plans to expand the eligibility criteria for the Warm Home Discount scheme, increasing the number of people who can apply by close to a third. Additionally, the value of the benefit will rise by £10 from £140 to £150 from October.
Fuel Duty
Fuel for vehicles has also seen steep rises in recent weeks, again due to the war in Ukraine. To counter this, the Chancellor could help consumers by temporarily removing VAT charged on fuel. Households spending £150 a month refilling their car, could save £25 per month, if retailers passed the entire saving to the consumer by removing VAT at point of sale.
The chancellor could also cut fuel duty by 5%, which has stood at the same rate for a decade, which would help prices stay level. However, fuel prices could increase further, as “global instability and biting sanctions on Russia continue to push up the price of crude oil” according to The Sun.
Other announcements
The Chancellor said that he and the government “recognises that inflation is rising and is closely monitoring the situation together with the Bank of England.”
And he suggested it was “putting in place policies to help families meet the rising cost of living, for example freezing duties, cutting the tax rate in universal credit and increasing the national living wage.” This rise in the national living wage was announced in the Autumn budget in 2021.
Speaking to ITVs Sunday Morning, Martin Lewis said: “As the Money Saving Expert who’s been known for this - I am virtually out of tools to help people now.
“It’s not something money management can fix. It’s not something for those in the lowest incomes, telling them to cut their bills will work. We need political intervention.”
Here's a breakdown of how the possible fuel changes will affect your household from Sky News.
Something else worth thinking about is the reduced VAT for businesses and hospitality, currently at 12.5% is also going to end on 31 March. This means that eating out, holidays, and accomodation will be charged at 20% VAT from that date — might be worth booking before the end of March.
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198 Comments
sorted byWritten like someone who access to wonderful public transport.
Unfortunately not everyone has that luxury.
Presumably the thing they'd show them is how to move production and tax out of the UK almost entirely?
Not sure how that has helped anyone actually still in the UK, but go Branson and Dyson (who both hoover up huge government subsidies btw - Branson has sued ours a few times - paid off by you and me. Go Richard!)
The French government did...
I think that has been said by someone in every parliament ever.
I love the fact this is all directed at me and not the actually understanding that this effects far far far more people than we know. Our neighbours, family, friends, are colleagues. Poverty is going to be massive and happen very quickly
Who advised everyone who would listen to stay on variable tariff back in sept time, glad I ignored him.
Note - Martin Lewis also said all these financial crises were there prior to the media Ukraine narrative - don't be fooled otherwise.
I'd vote for you 😁!
The oil companies are just using current world events to bolster what the lost (in profits mind you and they still made billions) from the pandemic when travel and flights and car usage was near non existent. Oil companies have to much power. If they are not earning enough they can slow production/product release to change the demand to supply ratio
As for loans etc. I agree that they should go after any fraudulent ones and profitable companies should repay money they took (many have).
But if they had tried to do all the standard checks, then that would have led to very long delays in issuing payments when ppl were calling for it yesterday..
There are other governments putting up taxes - not just the UK - all that public spending has to be paid for somehow.
And I don't buy all this stuff about mates contracts etc. It's an area I know a lot about and while it makes good headlines, it's generally not true - there are some very strict rules regarding public procurement (edited)
When fuel is rising at 6-10p per litre per week, a 5p reduction in duty is not going to help anyone.
Bezos... Well, I beleive psychopathy is found quite often in those that rise to the top. Unfortunatly, saving £5 on a book you want is hard to resist, if you arn't paticulary financially sound. However, I beleive that capitalism (if its the system we must use) has to be heavily regulated. Unfortunately, the billionaires fund electoral partys that tend to deregulate and shift the tax burdens onto the poor. They also buy media outlets to control the narrative and help retain the status quo (or just some strange maciavlion need to manipulate and control). Bezos bought the Washington post, which shortly afterwards ran an article that cautioned against taxing the super rich any more than they are being (which isn't a great deal anyway). And we are all familiar with Murdoch and his purchase of the Sun newspaper.
How much is our fault? Well, in our defence, I would point out a few things: Politics, personal finance and critical thinking isnt taught in School. I would argue this is a very deliberate decision, to keep we, the drones of society, constantly in debt, political unaware and easy to control (emotional control is quite effective, chest beating nationalism for example). All with the help of the predomintately right wing, billionaire owned media.
You know he is only a journalist, don't you?
Can you explain how the tiny amount of resources (on a global scale) expensively extracted by fracking and subsequently sold at market rates by private companies will do anything to significantly reduce UK fuel bills?
Expect lots of tinkering and no substance and fuel "slashed" by 5p a liter... (edited)
You could save money on some elements of spending (phone/mobile bills etc) but have you checked to see if you qualify for any assistance?
Try entitledto.co.uk/ for starters. (edited)
Anecdotal human error that must occur in a decimal percentage amount of times - an entire crate? I get certain supermarkets have hilariously bad substitutions (Asda), but how does a supermarket occasionally not having an item in stock at time of delivery differ from physically being in the shop and the item still being OoS?
But its like £3 for a delivery, much cheaper than hundreds on a car per week/month?!
If 3-5 business days to get a refund of £20-30 is too tight money wise then a car is definitely a bad financial decision lmao.
COVID that the gov and majority of people are pretending no longer exists now the RU/UK fad is in.
Absolutely no excuse for it.
Awful to hear that. The government needs to stand up to the oil/energy companies really. The profits they are bringing in are obscene.
A cut in fuel duty will help everyone whether they run a car or not. Everything we buy is transported by vehicles that use fuel, so any fuel increases will be reflected in the price of anything we buy, including food. (edited)
Where I live in Wales people rely on their cars to get from a to b. Even to go to the shop for basic needs. Now it’s becoming a minefield. My staff team are getting a slight pay rise in April. Brilliant you think, then you take into the count of the rise of national insurance and all the rises they can’t survive. I even had a team member ask me if they should quit work and stay home because it will be cheaper
Yep. We have oil and gas but we privatised it largely, so it's not "ours" anymore.
French government owns an 80% stake in EDF.
So in effect they're taking the hit as shareholders as well.
This country is a basket case, it really is.
No government can actually influence most things. They just claim credit for too many things to score votes. Eventually, whatever is given away today needs to be repaid.
A cut in petrol duty does nothing for the poorest who don't even own a car. What is required is differentiated solutions, and the voters need to accept that the bill will be due a few years later. But by then, elections will be due and the can will be kicked further. (edited)
Just in case you don't realise, the Government doesn't give disabled people a car, and there is no "mobility scheme".
The Motobility scheme, is an independent scheme where in exchange for the High Rate Mobility component of the DLA or PIP benefit a person receives, people can get a car instead. Whilst that may sound great, it only works if the ONLY thing stopping the disabled person from being able to be mobile is access to a car. If you are someone with a disability that both needs a car and to have someone with you when you are out and about, then you are SOL, because all your Mobility money has gone to getting the car, and you have none left for paying for a carer. And if you are in the lower benefit bracket and are in need of a car, you have no access to the scheme.
Disabled people in need of a car get no money extra to cover the cost of petrol. And any annual benefit increase they do get are well behind the true cost of living.
So, no, disabled people are not "more than taken care of" when it comes to cars, be they run on fossil fuel or electric.. (edited)
Most painful leaders I've ever seen who've got away with almost everything.
I don't think people realise how many people live on the cusp of poverty.
You can see the difference by looking at the deals on here, if you can afford a £400 fridge, a £500 set of golf clubs, a £1000 bike, £150 headphones etc.. you are not the ones in trouble.
It's the ones who buy a used fridge for £30, doesn't play golf, if they have a bike it will be a tenner from gumtree, if they use headphones they will be wired ones from Poundland.
(Not dissing the deals in anyway, if you can afford them great!)
As an employer and commercial user of energy I can say that we have already seen a bigger increase in electricity prices than domestic users, that cost increases are eye wateringly off the scale and that if nothing is done to cushion the blow of increased energy costs to us the effect on the economy will be nothing short of catastrophic.
7.5% inflation will seem low compared to what will be coming later, anything that requires a lot of energy to produce will double in price.
Politicians can't just keep saying that people will have to tighten their belts, intervention is unavoidable as the consequences of not doing so will not be a recession, it will be a depression