Find out how the summer 2015 Budget affects your finances
Published 9 July 2015 by Emily Bancroft
Will you have more or less money in your pocket after the changes?
Benefits, minimum wage and student finance were all affected by the changes by the Chancellor George Osborne in his summer 2015 Budget speech. If the new changes have left you confused over how they’ll affect you, we’ve broken down the impact of some of the bigger announcements:
Benefits cap: if you’re currently receiving benefits, the most you’ll now be able to get is £23,000 a year if you live in London and £20,000 if you live anywhere else in the UK. This will affect your finances if you’re currently receiving more than this.
Living wage: the national living wage will start at £7.20 an hour from next April and it will rise to £9 for over 25s by 2020. If you’re on a lower income, you’ll really feel the benefit of this as it means that your pay is also likely to increase and it could be easier to meet your bills.
Working Tax Credits: tax credits and Universal Credit will now only apply to the first two children. If you currently receive child tax credits and have more kids after the change takes effect in 2017, you won't be able to get tax credits for more than two children.
Inheritance tax: the threshold for paying inheritance tax will rise to £1m for married couples by 2017. While this seems like a lot, if your partner dies and they own a house that pushes them close to this amount, you’ll currently have to pay inheritance tax on this.
Student Maintenance Allowance: grants for students whose families earn less than £42,000 have been scrapped and replaced with loans. If you’re a student who qualifies for this, you’ll now be able to get up to £8,200 but you’ll have to pay it back.
Personal Allowance: the current personal tax allowance will be increased from £10,600 from next year to £11,000. This is good news for most taxpayers, as it means all except for the very highest earners will be able to earn more before paying tax, meaning more money in their pockets.
Sunday trading laws: local authorities and councils will now be able to make their own decisions on what time shops in their area are allowed to open and close. If you work in retail, this could be mixed news for you – depending on your point of view. Whilst it potentially means more hours you can work and earn it may mean getting less time off on Sundays.
Housing association rent: if you live in social housing or a local authority house and you earn more than £30,000 in your household – or £40,000 if you live in London – you’ll now have to pay up to the market rent for your property. This will make it harder for you to manage bills if you and your partner earn over this amount, as your rent is likely to increase.
Free childcare: working parents of kids aged three or four will receive up to 30 hours of free childcare a week from September 2017. This will be really useful if you’ve got a toddler and they’ll be three or four by 2017, as you won’t have to pay for as much childcare for them.