With his mini-budget reforms today, new Chancellor Jeremy Hunt has changed the outlook for millions of families.
We've looked at the numbers to cut through the national-level coverage of today’s fiscal statement to find the three most important aspects that will impact all Merseyside residents.
The cut to National Insurance will proceed in November
Boris Johnson raised NI contributions for all earnings above £12,570 a year from 12% to 13.25% in 2021. This was reversed by Kwasi Kwarteng last month and is due to occur in November. The new Chancellor will maintain this cut in NI. According to Plumplot, the average wage in Merseyside in 2021 was £33.5k, meaning the 1.25% cut will save the average Merseysider £261 a year.
Energy Price Guarantee will not continue past April
Prime Minister Liz Truss’s flagship policy, an average energy price guarantee of £2,500 per year on your bills, was meant to last from October this year until October 2024. Now it will end in April 2023. Mr Hunt announced “a treasury-led review” into the support offered after April, but it will most likely not be as helpful as the Energy Price Guarantee.
The £2,500 number is misleading as it is an average of many guarantees aimed at different sizes of dwellings. The graph above illustrates how much you would be paying without the Energy Price Guarantee.
Mortgage rates will go down due to increased market stability and cut in Stamp Duty
The massive reverse in tax cuts has helped calm the markets. This decision has moved the UK away from a financial blackhole and restored market confidence in the UK as a place to invest, meaning mortgage rates will begin to fall, having peaked at 6% last week.
Combined with the £2,500 cut to stamp duty, £11,250 for first-time buyers, this could make getting and paying off a mortgage in Merseyside more accessible than was feared just a week ago. However, this may not occur immediately as lenders are likely to wait to see the market reaction in the long term.
