What the Spring Budget 2023 means for your money

Written by Lori Campbell on 15th Mar 2023

The Chancellor of the Exchequer Jeremy Hunt has announced his first Spring Budget at a time of rocketing inflation, mass industrial action and a cost-of-living crisis.

Mr Hunt began by saying that the UK is now predicted to avoid being in a recession in 2023. He said inflation is predicted to fall to 2.9 per cent by the end of this year, down from 10.7 per cent in the last three months of 2022.

The “back to work” Budget has a focus on prompting those who have left their jobs to return to the workforce and stemming the impact on households of rising bills.

Here are some of the key ways that your own money is likely to be affected:

A reprieve on energy bill increases, for now

Energy price guarantee to stay: The energy price guarantee which caps the average annual bill for gas and energy customers, had been set to rise to £3,000 from April. Hunt confirmed it will remain at £2,500 until at least July, saying: “Some people remain in real distress, and we should always remain ready to help when we can.” He said the measure would save the average family £160.

Help for prepayment meter customers: Hunt announced £200 million of extra help for those with prepayment meters, to “bring their charges in line with comparable direct debit charges”. This is expected to save about four million households £45 a year.


Over 50s being lured back into work

Pension lifetime allowance scrapped: In a bid to lure over-50s who took early retirement back to work, Mr Hunt abolished the lifetime allowance on pensions. This is the maximum amount that workers can put into their pension pots before they are taxed. The lifetime allowance is currently just over £1 million.

Returnerships: There will be Government-funded “Returnerships” (internship for adults who’ve had time out of work) alongside skills boot camps and sector-based work academies targeted at the over 50s who want to return to work.


You won’t be paying more for fuel or alcohol

Fuel rate frozen: Rishi Sunak temporarily cut the fuel duty rate from 57.95p per litre to 52.95p when he was chancellor to keep soaring pump prices down. This was due to end later this month, adding five pence per litre to the price of petrol and diesel. However, Mr Hunt confirmed he would freeze duty for the 13th consecutive year, saving drivers £100 a year.

Cheaper to go to the pub: The duty on draught products in pubs will be up to 11 pence lower than the duty in supermarkets from August, Mr Hunt said, as part of the “Brexit pubs guarantee.”


More help with childcare

Free childcare extended: Parents of children aged nine months to five years will get 15 hours free childcare to encourage caregivers to enter the workforce. The funding will only apply during term time and where both parents are working at least 16 hours per week. It will be staggered from April 2024 to ensure enough places.

Increased wraparound care: There will be funding for schools and local authorities to increase wraparound care so all parents of school-age children can drop their children off between 8am and 6pm.

Advanced payment for parents on benefits: Parents on Universal Credit will receive up to £951 for one child and £1,630 for two children per month, which will now be paid upfront.

Boost for childcare suppliers: Incentive payments of £600 will be piloted for childminders joining the profession – £1200 if they join through an agency. Funding to nurseries will increase by 30 per cent over two years. The minimum staff to child ratio will change from 1:4 to 1:5 for two-year-olds in England, though this will remain optional.

Changes to disability benefits

No more work capability assessment: The government will abolish the work capability assessment for disabled people and separate benefit entitlement from an individual’s ability to work. The aim is to enable disabled people to seek work without fear of losing their benefits.

What about the environment?

The Budget is focussed on much-needed immediate help for people struggling with the cost of living crisis and incentivising a return to work. However, there isn’t much new long-term investment in measures that will tackle the climate crisis, or a transition to greener energy and green jobs for the future. Here’s what there is:

Nuclear reclassed as ‘environmentally sustainable’: Nuclear power is to be classed as “environmentally sustainable,” giving it access to the same investment incentives as renewable energy.

Up to £20 billion for carbon capture: In a bid toreduce the carbon emissions that contribute to climate change, Mr Hunt allocated £20 billion of support for the early development of carbon capture, usage and storage. He says this will support up to 50,000 jobs, attract private sector investment and help capture 20-30 million tonnes of CO2 per year by 2030.

Fund for sustainable transport in eight cities: Mr Hunt announced a second round of the city region sustainable transport settlements, allocating £8.8 billion over the next five-year funding period

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