Budget Recap 2021- How will it affect your finances.
Article by Barclays Bank
From extending support for workers affected by coronavirus (COVID-19) to helping home-buyers and freezing income tax thresholds, the government has unveiled a series of changes that could affect your finances.
If, like many people right now, your income is being affected by coronavirus, there were measures unveiled in this year’s Budget that could offer some reassurance in the coming months.
With economic conditions still uncertain, the Chancellor announced an extension of the furlough scheme for a further six months.
This means that if you're already on furlough, and were concerned about the scheme coming to an end in April, you now have some assurance that the scheme is available to employees until at least September.
If you're in employment, but concerned that your job could be at risk, the extension of the scheme could now open up furlough, rather than redundancy, as an additional option for your employer.
Under the extended scheme, you would continue to receive 80% of your salary for the hours you can’t work, up to £2,500 a month. The only change is that, from July, this won't be paid entirely by the government. Instead, employers will be expected to contribute a proportion of these wages, starting at 10% and rising to 20% from August.
If you're self-employed and your turnover has been affected by the pandemic, the Budget also contained fresh support that you may be eligible for.
You may be able to take advantage of the Self-Employed Income Support Scheme (SEISS), which has also been extended until September and could help if your income is reduced in the months it covers. This option could now be available to you even if you only started working for yourself in the 2019-20 financial year.
If you can show your turnover has suffered as a result of the coronavirus pandemic, you may be able to claim up to 80% of three months’ average profits for the February to April period, capped at £7,500 in total.
However, the scheme has been updated slightly and self-employed people whose businesses have performed relatively well will receive less help for the May to September period. If your turnover has fallen by 30% or more, you could continue to claim a grant worth 80% of three months’ average profit. If your total turnover has fallen by less than 30%, you could claim the equivalent of 30% of three months’ average profit, capped at £2,850.
To help lower earners, the Chancellor also announced a 2.2% rise in the National Living Wage (NLW) from £8.72 to £8.91. This is the equivalent of a £350 pay rise for you if you are working full time on the NLW.
If you're out of work right now, then there could be some help on the horizon following the announcement of a new apprenticeship drive. The government hopes to create 40,000 new apprenticeships by paying £3,000 grants to employers in England for each apprentice they take on.
In addition, if you are claiming Universal Credit, you will be able to continue claiming a £20 per week ‘top up’ for the next six months. If you claim Working Tax Credits you will receive the same amount but in the form of a one-off payment of £500.
However, keep in mind that this top-up will end in September, so it might be worth thinking ahead with your finances as much as possible.