What a time to become chancellor of the UK! Rishi Sunak has been thrown straight into the deep end of the economy. How has the Spring 2020 budget affected you?
Brexit dominated much of 2019 as the UK’s relationship with the European entered a new era. Then, just when the negotiators took their seats for the next phase, a global issue dominated the headlines.
Chancellor of the Exchequer Rishi Sunak must have been busy in recent weeks, and that’s an understatement.
The Covid-19 virus has touched lives across the globe in a short space of time. How he and other decision makers respond will impact all our lives.
A nation’s health
We have always felt that wellbeing is made up of many factors. Financial, mental and physical health are often interlinked.
The Spring 2020 Budget focuses on all these themes. It must. For example, a £30 billion stimulus package has health and the NHS at its core.
In addition to doctors and hospital services, the package aims to keep the country functioning.
Statutory Sick Pay (SSP) will be paid to all people who have been advised to self-isolate because of virus symptoms. This will impact businesses, so those with fewer than 250 employees will be heartened that the government will refund up to 14 days’ SSP.
To support small businesses further, a Coronavirus Business Interruption Loan Scheme was announced. A £1bn fund of government-backed loans will be available for organisations experiencing increased costs or cashflow disruptions because of the virus.
Also, the Bank of England base lending rate was dropped to a historic low of 0.25%. This basement rate is to encourage investment during challenging times.
As always, the BBC carries a concise summary of key points for small business owners.
Promises to individuals
The first things many people look for when the budget is announced are items that affect everyday life.
Personal taxation levels, fuel and alcohol tax, pensions, and funding for community projects all grab the headlines.
The government has made good on pre-election promises. From April, the personal tax allowance will be frozen at £12,500. That means anyone can earn up to that amount before paying 20% tax on subsequent earnings.
For those on higher salaries, also frozen is the £50,000 threshold when the 40% taxation rate kicks in.
One thing that is rising is the National Insurance threshold. That’s means that workers will only pay NI contributions above £9,500 after April 2020.
Although the Covid-19 virus has affected social habits considerably, many were happy to see the chancellor once again freeze duty on beer, wine and spirits.
Housing initiatives were boosted on several fronts. A £12.2 billion affordable and safe housing scheme was announced, and funds were also released to build upwards of 70,000 homes in areas of high demand.
We’re in it for the long term
The chancellor’s statement was delivered as several significant challenges face the country. Despite this, he remained upbeat, as recorded on the Gov.uk site.
He said: “This is a Budget that will deliver on our promises to the British people and it is the budget of a government that gets things done.
“We’re at the beginning of a new era in this country. We have the freedom and the resource to decide our own future.”
The latter is certainly true. We can all decide our own future. That’s something Logic Wealth Planning helping clients achieve.
More so than ever, getting the right independent advice is essential when making important financial decisions that will affect you in later life.
Please be aware the value of investments or income from them can fall as well as rise. We’re here to help you make informed decisions.
Call us on 0808 1234 321 or email email@example.com to discuss any aspects of the latest budget and how best you can plan for your future retirement.
* Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire and the surrounding area, but not limited to the region.