The Spring Budget 2017 delivered by Chancellor Philip Hammond has been described as a budget to:- “take forward our plan to prepare Britain for a brighter future”.
The economic predictions made in the Autumn Statement last year were similar to those given by the Office for Budget Responsibility (OBR). It is predicted that inflation will rise by 2.4% this year, 2.3% in 2018 and 2% the year after that.
UK Growth is expected to be 2% this year (this figure has been revised upwards from the 1.4% forecast given in the Autumn Statement last year) and growth is expected to be 1.6% the year after.
The level of borrowing for 2016/17 is predicted to be £51.7 billion (This is £16.4 billion lower than was thought in the Autumn Statement last year) and public sector net borrowing is expected to fall from the 3.8% of Gross Domestic Product (GDP) last year to 2.6% in 2017.
This year’s Spring Budget 2017 had a few new measures, but most of the announcements only come into effect next year.
It was confirmed by the Chancellor that from April this year:
there will be a rise in the national living wage to £7.50/hour
there will be a rise in the personal allowance to £11,500 and the threshold for paying higher rate tax rose to £45,000 (£43,000 in Scotland)
a new NS&I bond was introduced which pays savers a rate of 2.2% on deposits of up to £3,000.
A summary of the main features of the Spring Budget report 2017 is given below.
Money Management March 2017 report government measures that will distort childcare costs with a family earning the national average spends up to 1/3 of their net income on childcare costs, according to the IEA (Institute of Economic Affairs).
The government currently spends well over £7 billion a year on childcare benefits. The IEA claims that current government subsidies, such as the free hour’s entitlement, have distorted childcare prices & made childcare much more expensive.
As well as pushing childcare prices up, the IEA believes that government interventions have significantly reduced parental choice & not produced an improvement in childcare quality.
Len Shackleton, editorial and research fellow at the Institute of Economic Affairs, said:
“Regulation has led to an excessive formalisation of childcare & preschool, which has not only pushed up the subsequent costs but paid scant attention to parental choices.
“Many families may not wish to partake in the structural form of preschool that the government requires as standard.”
Our team of Warrington Independent Financial Advisers at Assured Wealth work as part of the free money management financial advice programme. They give up their time to work with young adults in schools, colleges and universities across the North West of England.
Mark Jones the MD said: “We do not charge schools to operate this project. The lessons offer key learning skills as part of PSHE Financial Capability”.