Autumn Budget 2021 personal Finance and Inequality

With the revelation of the autumn budget on 27th October 2021, various insights and observations have been taking place. And this has led to concerns over the terms and conditions of all the budgetary reforms.

Let’s have a sneak-peak into expert reviews on subjects of Personal Finance and Inequality in compliance with the autumn budget:

Inequality

Despina Alexiadou, Senior Lecturer at the School of Government and Public Policy, University of Strathclyde

“The average household is likely to be worse off, while business wins.”

According to her, the biggest winners are the financial institutions in the pro-business budget, as these firms will see a drop in their corporation-tax surcharge from 8% to 3%, apart from the fact that their overall corporation tax rate will see a steep rise by a percentage point. Other ones in the queue to benefit from the budget through lower business rates are pubs, restaurant and bar owners, and drinkers through lower alcohol duty for drinks like beer, wine and cider.

One of the most welcome announcements is the increase in the minimum wage. Given the current inflation of 3% and rising energy prices, the modest increase of just under 7% from 8.91 Euros to 9.50 Euros sounds more generous than the previous year’s reforms. Another crucial task is to lift the pay freeze for public-sector workers.

In terms of social investment, two other measures are worth a mention: a 48% rise in skills investment and the promise to spend 1.8 billion Euros on developing brownfield land for housing. The average household will certainly be worse off than before when we add the new higher rate of national insurance for employees and the self-employed announced in September.

Personal Finance

Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University

“A limited universal credit boost but no help with bills”

The most surprising fact is the lack of help for households with the cost of energy bills, the price cap of which rose 12% from 1st October, with an additional 30% rise forecast for April 2022. The speculation that VAT on energy might access the Winter fuel payment or get cut-off did not materialise.

The Government has reduced benefits for work employees from 63p to 55p in every pound earned over the monthly “work allowance” threshold. This benchmark of 293 Euros for those who receive housing support is now rising to 335 Euros. But note that these work allowance policy companies only apply to those who have children or limited capability for work.

Overall, 2022 looks tough as the pressure from energy bills, both the personal income tax allowance and income tax bands, are now frozen. National Insurance payments are rising 1.25% along with. On the same note, annual inflation is set to reach 4.4 % if the Office for budget responsibility follows.

FinConcile is a team of accredited and seasoned specialists who specialise in accounting, tax, payroll, and compliance. Our team consists of CAs, lawyers, Company Secretaries, and other finance specialists who help accounting firms achieve long-term growth cost-effectively and accurately. Our outsourcing services website enlists all the services with which we help you bring functionality into your business premises.