Chancellor Jeremy Hunt has delivered his first Budget speech this week, with a focus on the cost of living and ways to help people get back into employment. The Chancellor began proceedings by revealing that the Office for Budget Responsibility (OBR) is now predicting the UK will avoid a recession this year, although the economy will still shrink by around 0.2%, according to its forecast. Having hit 10.7% at the end of 2022, UK inflation is now expected to drop to 2.9% by the end of 2023 – much closer to the Government target of 2%.
New measures announced
The Energy Price Guarantee has been extended for a further 3 months, meaning bills for a typical household will be capped at around £2,500 a year . The Chancellor said that “with energy bills set to fall from July onwards, this temporary change should bridge the gap and ease pressure on families”. Bills for those on prepayment meters will also be brought in line with those who pay by direct debit from 1st July. There was good news for parents, with the Chancellor announcing an extension to free childcare hours. The new plan will be introduced in stages to eventually provide 30 hours of free childcare to all under-5s from September 2025. The annual pension allowance – the amount someone can pay into their pension each year without penalty – is to be increased by 50% to £60,000 from April, while the lifetime allowance is set to be abolished. The changes are part of the Government plan to encourage more people back into work, and is backed up by a new £63m programme for the over 50s, which includes skills boot camps and ‘returnerships’.
Stamp Duty
Whilst there were no new announcements for housing in the Budget announcement, the good news is that the improvements to Stamp Duty made in the mini Budget will stay in place until April 2025. The nil rate band increased to £250,000 and first time homebuyers pay no stamp duty on properties up to £425,000 and can claim relief on properties up to £625,000. You can find out how much you might save by using our Stamp Duty Calculator.
