Budget 2018 explained: what it means for students and young people
It's that time of year again; the leaves have turned brown and the jumpers have come out which can only mean one thing... the Autumn Budget! Find out how it affects you right here.
Credit: UK Department for International Development - Flickr
Phillip Hammond, Chancellor of the Exchequer aka Theresa May's right-hand man, has announced the 2018 autumn budget. Increasing wages to encourage spending during Brexit doom and gloom are on the agenda this year.
You're right in thinking that it's been announced earlier than usual; the Autumn Budget is usually announced in November.
This year Brexit will be taking centre stage in November, so the government moved the budget announcement up to avoid a clash (and getting its knickers in too much of a twist).
The main takeaway is that the government has announced the 'end of austerity'. But what does this really mean for students?
What is the budget we hear you ask?
Basically, it's the government's tax strategy and plans regarding which public sectors they're going to spend their dosh on during the next financial year starting in April 2019.
There's also a Spring Budget, a.k.a the "mini-budget" that was announced in March year, which sets the general tone of spending on public services for the year.
So now we know what it is, let's take a look at what's in it and how it will affect you this time around. 🙂
The changes that will hit your pocket
All of the changes announced will affect your day-to-day life, but some you'll feel more than others. Here are five that you'll feel right in the pocket fo' sure.
Pint price freeze
The Chancellor has announced that the price of beer, cider and spirits will... not go up!
Is this good news?
Definitely!
Okay, it's not the same as a reduction but this means that the price of a round will stay the same.
Last year Hammond froze taxes on some ciders and all wines, spirits and beer, although he did increase taxes on white ciders. This year prices should stay the same, which means that you won't be breaking the bank (more than you already are) to enjoy a cold one on a Friday night.
Over a tenner for a packet of 20?!
The Chancellor has announced a 2% increase on the price of tobacco. This means that you'll spend on average around £10 per packet of 20.
Is this good news?
Well, yes and no. If you're a smoker this is definitely not good news in the short-term as your already expensive habit is on the up. You'll be a lot less keen to hand out a cigarette or two to that mate who NEVER seems to have a packet on him/her.
On the long-term though your lungs will thank you for it. At the risk of sounding a bit like your mum, reducing the number of cigarettes you smoke in the long term can only be a step in the right direction. It might even help you to quit.
Last year Hammond added an extra 28p to the price of a packet of 20 cigarettes. Increasing tax on tobacco been criticised in the past as it is seen as an easy way for the government to make money and consumer's rights watchdogs fear that the hike in price will hit the poorest the hardest.
Personal allowance increase
Credit: Images Money - Flickr
You'll be getting a pay rise! Well, sort of.
Everyone who works is entitled to something called a personal allowance. This is an amount of income you don't have to pay tax on. Nilch.
Thereafter you have to pay a 20% income tax on any money you earn until £46,350 (it then goes up-up-up to 40%).
The personal allowance was raised to £11,850 this April. Hammond has announced that this will be increased to £12,500 from April 2019.
Is this good news?
For sure! This means that you won't have to pay ANY tax on the first £12,500 amount you earn at your first job. Just make sure you try and put at least SOME of that into your bank account instead of blowing it celebrating the tax you don't have to pay...
National Living Wage on the up
From April 2019, the National Living Wage will get an all-around boost.
For those under 25 wages will increase as follows:
- From £7.83 to £8.21 per hour those aged 25 and over
- From £7.38 to £7.70 per hour for 21 to 24-year-olds
- From £5.90 to £6.15 per hour for 18 to 20-year-olds
- From £4.20 to £4.35 per hour for 16 to 17-year-olds
- From £3.70 to £.3.90 per hour for apprentices.
Is this good news?
A boost to the National Living Wage is always welcome.
However, many still think that increase doesn't stretch far enough to cover the actual cost of living, including the head of the Institute for Public Policy Research Tom Kibasi.
The increase in the so-called ‘National Living Wage’ will still mean it is BELOW the real living wage—what it costs to live. #EconomicJustice
— Tom Kibasi (@TomKibasi) October 29, 2018
The 26–30 railcard
Hammond has announced that the 26-30 railcard will be rolled out by the end of the year.
At the moment, those of you aged between 16 and 25 can buy a railcard that will knock a third off the original price of your journey. This new railcard will extend that luxury for another five years.
Is this good news?
Discount on transport? For another five years? Yes pur-lease.
However, the excitement around this may be lukewarm. Railcards aren't usually valid during peak times and cannot be used to buy season tickets.
It's also worth noting that this railcard was announced during last year's budget and has yet to see the light of day...
Other important changes
Some of the changes announced will affect your day to day indirectly. More like a rising tide rather than a tidal wave.
£2 billion a year for mental health services
Today I can announce that the new NHS Plan will include a new mental health crisis service 👩⚕️👨⚕️ #Budget2018 pic.twitter.com/b0XoA0XWAQ
— HM Treasury (@hmtreasury) October 29, 2018
The Chancellor has announced £250 million pounds a year (to increase to two billion) to fund a new mental health crisis service.
The new services will include:
- 24/7 support via the NHS 111 helpline
- Children and young people's crisis teams in every part of the country
- Comprehensive mental health support in every major A&E
- More mental health specialist ambulances
- More community services.
The NHS will also prioritise services for children and young people, with school-based mental health support teams and specialist crisis teams for young people. It will also expand the Individual Placement Support programme for adults.
Is this good news?
This comes after reports earlier this month that delays to access to important mental health services were putting people in serious financial difficulty and causing enormous emotional upheaval. Some had waited up to 13 years before gaining access to treatment.
So yes, our mental health services need all the help they can get. However, with a shortage of nurses and increasing pressure on NHS staff, time will tell whether the government has the manpower to make this happen. Properly.
Plastic packaging tax
Credit: Disney Pixar
In a bid to reduce single-use plastics, the government will introduce a new tax on plastic packaging, meaning that packaging that isn't made up of at least 30% of recycled content will be taxed.
Is this good news?
Again, any bid to save the environment from impending doom is welcomed with open arms.
But the Chancellor avoided any possibility of introducing the much anticipated "latte levy". The latte levy would have charged around 25p for each single-use coffee cup, which arguably would have been more effective than a tax on packaging containing less than a third of planet-friendly matter.
Student Finance reform
Credit: Channel 4
And then there's the Student Finance reform.. which was not mentioned.
Theresa May announced an independent review of student fees and finance that could lead to reductions in the cost of tuition and interest rates of loans back in February this year.
The current system has received major criticism as most courses bear the £9,250/year price tag, so competition on prices is next to non-existent.
There was no mention of this in the Autumn Budget. This may be because this was launched as an independent review and is still ongoing. We can only hope.
And as to be expected, the speech included toilet puns aplenty. Think the Autumn Budget is as leaky as Philip Hammond's jokes? Let us know in the comments below!
