Philip Hammond delivered his first spring Budget (and last) today as Chancellor. He announced changes to National Insurance for the self-employed, the National Living Wage and childcare in his 2017 Budget speech. After today, the Budget speech will move to the autumn.
To make sure you understand what these changes could mean for you and your finances, we're going to run you through the main announcements.
Tax rise for self-employed
The amount of tax you pay could increase next year if you're self-employed. The main rate of Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and 11% in April 2019. Class 2 contributions – which are a lower threshold – are getting cut.
You’ll only have to pay more as a result of these changes if you're self-employed and get over £16,250 in profits.
New savings product
The Chancellor gave more details about a Government-backed savings product which was first announced in November's Autumn Statement. National Savings and Investments will offer the Investment Guaranteed Growth Bonds by April with an interest of 2.2%.
The bond will be open to anyone over 16 years old. Savers can invest between £100 and £3,000 and must lock in their money for three years.
The amount of income you need to earn before you pay tax is increasing. The Personal Allowance is increasing from £11,000 to £11,500 from April 2017.
National Living Wage
The National Living Wage will rise to £7.50 in April 2017. That means your pay will increase by 30p an hour from £7.20 if you're aged 25 or over. The National Minimum Wage will increase to £7.05 for those between 21 and 24 years from April.
You can find out the different between National Minimum Wage and Living Wage in our blog.
Tax-free childcare will be available for working parents soon. Working parents with kids aged three to four will be able to get an extra 15 hours of free childcare a week from September. The scheme could see parents save up to £2,000 a year per child under 12 years of age.
The Chancellor also announced free school travel for all children on free school meals who go to selective schools.
Clearer terms and conditions
There will be more protection for people who accidentally end up with a subscription after signing up to a free trial. The Chancellor announced plans to make the terms and conditions shorter and clearer for 'continuous payments subscriptions' – these are automatic payments which work like a Direct Debit.
You can find out how to cancel a free trial in our blog.