The New’ chancellor’s budget is about to come into effect – how will it impact you?

The New’ chancellor’s budget is about to come into effect – how will it impact you?
January 13 12:10 2017 Print This Article

The Chancellor of the Exchequer gave his Budget to Parliament on Wednesday 16 March 2016.

There are some significant changes coming our way, here are the highlights and a summary of how it could affect individuals and businesses moving forward.

A pay rise for minimum wage workers

Pay rises across the board for minimum wage workers will come into effect in April, for the over 25’s basic minimum wage will rise to £7.50 per hour, giving an average annual pay-rise of £500 for those who are ‘just managing’.

The government are working towards a minimum wage of £9-£10 per hour by 2020, which is badly needed due to recent inflation and the cost of living. The exchange rate and the struggling economy have impacted on even the most modest budgets, so this increase is designed to take some pressure off those who need it most.Image result for The New' chancellor's budget is about to come into effect – how will it impact you?

IPT set to increase again to 12% – causing havoc for renewal premiums

Insurance Premium Tax will rise again to a staggering 12%. This will impact the majority of insurance products including protection, automotive and business policies. The direct knock on effect to both individual and business owners will be a immediate increase in premiums. For customers who currently hold expensive insurance cover such as private medical insurance, the price hike may push them out of the market. The FCA have brought into force legislation that will force brokers to at least offer a full market appraisal each year, it’s very easy to just renew your cover, however with premiums escalating, now is the time to shop around the market and change insurer.

No more lettings fees for rental administration – long gone are the days where lettings agents can charge £200 for a tenancy agreement or inventory. This is to combat the excessive costs of renting especially when faced with moving house regularly. In the short term this should take the pressure off renters, however in the long term, lettings agents will likely charge a larger management fee, which will lead to an increase in rental prices. The only real way to put a cap on this market would be to limit investment rentals, or to increase social housing availability.

Cold callers to be targeted

Almost 11 million pensioners are targeted by as many as 250 million cold call scams a year. That’s an average daily rate of nearly 25 unwanted calls.

Under the new proposals, all calls where a business has no existing relationship with the individual will be forbidden. This ban will be enforced with fines of up to £500,000.

For most, this will come as a welcomed change, however some older, less money-savvy residents may lose the opportunity to compare various insurance, energy or utilities packages as they are less likely to have access to the internet.

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Lana Walton
Lana Walton

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