The Chancellor's Spring Budget is set to be delivered on Wednesday lunchtime and is expected to outline targeted measures to boost workforce participation for benefit claimants, the over-50s and the long-term sick and disabled. Tackling economic inactivity is a key component of Jeremy Hunt's plans, as employment numbers have languished far below their pre-pandemic levels, harming the UK's already-struggling economy.
The Treasury confirmed this morning that the Energy Price Guarantee will be extended for a further three months from April to June at its current level, capping average annual household bills at £2,500. This will be a huge relief for millions of households who were bracing for a £500 increase to their gas and electricity bills, but it is doubtful that the £400 Energy Bills Support Scheme will also be extended once it ends this month, or that the £150 Council Tax rebate will be applied again this year.
As part of what is being called a ‘Budget for growth’, it has been reported that Mr Hunt will announce the axing of the system used to assess eligibility for sickness benefits - Work Capability Assessments. He is also expected to increase childcare support in England for Universal Credit claimants, and pay the costs upfront, which could result in changes north of the border.
Key things to watch out for in the Spring Budget
Here are five things to watch for in the Chancellor’s statement that could affect millions of people across the country.
Back to work
Efforts to encourage the over-50s, the long-term sick and disabled, and benefits claimants back into the workplace are likely to form a key part of the Budget.
In a pre-Budget release from the Treasury at the weekend, it emerged that Mr Hunt has plans to axe the system used to assess eligibility for sickness benefits Work Capability Assessments).
The biggest reform to the welfare system in a decade will mean claimants can continue to receive the payments after they return to employment.
Childcare boost
Mt Hunt is expected to announce that parents in England on Universal Credit will be paid childcare support upfront to help them find and start work. He is also expected to announce a rise in the maximum Universal Credit childcare allowance by several hundred pounds.
Working parents in England with children aged between one and two-years-old are set to receive 30 hours free childcare, but this could also have a positive knock-on effect for Scotland which already offers funded early learning and childcare.
Energy bills
As previously mentioned, the Treasury has confirmed the the £2,500 Energy Price Guarantee will be in place until June. But could there be more targeted support on the way?
A pre-Budget announcement also confirmed that the so-called “prepayment premium” is set to be cut on prepayment meters from July 1.
This is expected to save around four million prepayment customers £45 a year on their energy bills.
State Pension age
There have been widespread reports that the State Pension age could rise to 68 sooner than had been expected.
A recent debate in Parliament urged the UK Government to give people at least 10 years' notice before implementing the change.
DWP boss, Mel Strife also recently confirmed he is reviewing the State Pension age.
Pensions
It has been reported that the Chancellor is considering raising the £40,000 cap on tax-free annual pensions contributions.
It could come among a a rise in the lifetime allowance (LTA) on tax-free pensions savings.
Cost of living support
No further additions to the five cost of living payments worth a total of £1.350 over the next financial year are expected to be announced. Exact payment windows will be released by the Department for Work and Pensions (DWP) once the qualifying period has passed.
There have been recent calls to reinstate the weekly uplift to Universal Credit which was paid to millions of people during the pandemic and to increase it to £25 and include legacy benefits. It is highly unlikely that this will be announced.
Chancellor Jeremy Hunt will deliver the Budget in the House of Commons today at around 12.30pm - straight after PMQs, which starts at noon.
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