Today’s Thrifty Thursday is mainly going to be about the Spring Statement that was given yesterday by Rishi Sunak.
Spring Statement
There are a few real personal finance changes happening. This is what I will focus on. Unfortunately, what was said wasn’t all that great.
Petrol & Diesel
Firstly, a 5p cut per litre at the petrol pumps. 5p might have been a lot once upon a time. But I’ve been tracking prices and they have risen more than 1p a day over the last 10 days. A 12p increase in 10 days. So a 5p discount doesn’t really touch the sides. Yes, it’s a discount, but it’s a discount after a huge increase. The discount went into play at 6pm on 23/03/2022. I wonder if this discount will actually been seen on the forecourts. I’ve taken screengrabs of the prices on petrolprices.com to see if it actually trickles through. There is no windfall tax on companies making super profits, which there could have been and many were calling for.
Energy Saving Materials
Next, there is a VAT cut on energy saving materials such as solar panels and heat pumps. It was 5% VAT but it will now be 0% VAT. There has been no VAT on these items in other countries, and we’re supposed to see this as a plus point. I highly doubt that those people who are struggling to heat their homes and put food on the table are looking through solar panel brochures. This is actually a benefit to those who are more well off and might have the money to invest in these sort of energy saving materials. It is not a solution for those struggling right now.
Household Support Fund
There was already £500million being given to local authorities to help the poorest in society. This was called the household support fund. In his Spring Statement, Rishi Sunak has given another £500million, doubling the amount going to local councils to help people in need. I just hope that money actually finds the way to those who need it. When I’ve tried getting money from local authorities, it is like getting blood from a stone.
A Change In National Insurance
This is the only minor benefit that people will see and it isn’t a short term win to help those struggling right now. There will be changes, from July 2022, to who pays National Insurance contributions. Currently if you earn around £9000 a year you’ll pay NI. However that is rising to be in line with when you start paying income tax. This means that if you earn less than £12570, you will not pay National Insurance, just like you won’t pay tax. We all know that the amount of NI we pay is increasing. So it’s hard to see if this is of any real benefit to people. When you crunch the numbers, if you earn under £35k, you’ll be slightly better off. Anyone earning over £35k a year will pay more.
Income Tax Rate
It was also announced in the Spring Statement that from 2024, income tax basic rate will drop from 20p in the £ to 19p. Right now, it is little more than a carrot on a stick to get us to vote the Tory party back in at the next general election. There is plenty of time for this promise to be U-turned on, so let’s not get too invested in tax drops.
Little Lego Discounts
If you’re looking for a little something for the kids for the Easter holidays, Tesco have a Clubcard price on selected Lego polybags. Rather than £3.50 each they are 2 for £5. The offer includes LEGO Creator 3in1 30583 Easter Bunny, perfect for an alternative Easter gift!
