Jeremy Hunt is set to unveil key pension and childcare benefit changes in his highly anticipated Budget on Wednesday.
The chancellor is reportedly considering raising the £40,000 cap on tax-free annual pension contributions, as well as increasing the state pension age to 68.
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 plank of Mr Hunt’s plans.
The Budget comes in the wake of the autumn statement last November, which saw the chancellor hike taxes as he and Rishi Sunak sought to restore UK financial credibility after Liz Truss’ short-lived premiership.
This time, the chancellor is expected to focus on measures that will get various cohorts back to work as part of a wider push to boost growth.
It follows the release of new figures from the Office for National Statistics which show no change in Britain’s unemployment in the three months to January.
The chancellor will announce the Budget at 12.30pm following prime minister’s questions.
Jeremy Hunt mulling raising cap on tax-free annual pensions contributions
Jeremy Hunt is known to be considering raising the £40,000 cap on tax-free annual pensions contributions – and could reportedly hike it to £60,000.
Mr Hunt’s team has also looked at a possible increase in the lifetime allowance (LTA) on pension savings, another tweak Mr Hunt’s team has looked at. The tax-free lifetime amount could rise from £1.07m to as much as £1.8m, according to reports.
Meanwhile, other reports suggest that the UK state pension age could rise to 68 sooner than expected.
What cost of living measures are expected in the Budget?
Jeremy Hunt is expected to cancel the planned £500 hike in the government’s ceiling for energy bill support which was due to come into force next month.
For the average household that means bills will stay at around £2,500, instead of going up to £3,000 as was previously announced.
On fuel duty, some Tory backbenchers have urged the chancellor to act to support motorists facing a 12p-per-litre hike in fuel duty in March. A 23 per cent increase in the duty is pencilled in for this month, but chancellors have repeatedly frozen the levy in the past. Mr Hunt has so far not said what he will do.
Action is expected on prepayment meters with the Chancellor set to end the so-called “prepayment premium” from July – which the Treasury expects will save more than four million households £45 a year on their energy bills.
Struggling public swimming pools will also be handed assistance to cope with their rising energy bills, with a £63m one-off pot to be created. Most of the money will be earmarked for leisure centres to invest in moving towards renewable energy forms.
Hunt told he is running economy like ‘Jeremy from accounts’
Speaking to Sky’s Sophy Ridge on Sunday show, the chancellor was told that he was running the economy “like Jeremy from accounts”.
He replied that “Jeremy the chancellor will be responsible with public finances, I make absolutely no apology for that”, adding: “What you will also see on Wednesday is that we have a plan to tackle the biggest problems we face as a country.”
Hunt vows to ‘go further to bear down on inflation’
Jeremy Hunt earlier vowed to ”go further to bear down on inflation” in Wednesday’s Budget.
“The jobs market remains strong, but inflation remains too high,” the chancellor said this morning. “To help people’s wages go further, we need to stick to our plan to halve inflation this year.
“Tomorrow at the Budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”
Job vacancies fall for eighth month in a row amid economic ‘uncertainty’, as Hunt prepares ‘back-to-work’ Budget
Vacancies across the UK have fallen for the eighth month in a row as firms hold back on hiring amid woes in the wider economy, official figures have shown as Jeremy Hunt prepares to unveil his “back-to-work” Budget.
The Office for National Statistics revealed a 51,000 drop in the number of job vacancies to 1.12 million in the three months to February, while the redundancy rate edged higher, which it said “reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.
Britain’s unemployment rate remained unchanged at 3.7 per cent in the three months to January, but the drop in vacancies signalled cracks in the jobs market as economic uncertainty weighs on companies.
The figures also showed there were 220,000 days lost to strike action in January, down from 822,000 in December, with schools the hardest hit.
Chancellor urged to use Budget to boost public sector pay in face of ‘mass exodus’
Jeremy Hunt has been urged to invest in public sector pay in the Budget, as new research by the Trades Congress Union (TUC) suggested nearly two in five workers are actively considering leave their profession – with a third citing low pay as a reason.
One in six public sector workers said they were skipping meals and one in 14 is using a food bank, according to the TUC – which warned that public services are facing a “mass exodus” of workers unless the current wave of pay disputes is resolved.
Unison union assistant general secretary Jon Richards said: “Decent public services are the bedrock of any society but they can’t exist without people to run them. It doesn’t take a rocket scientist to fathom that pay is key to keeping and attracting a motivated workforce.
“The government must invest in pay in the Budget so schools, hospitals, town halls and care homes can better compete with wages in the private sector. That would help boost staffing levels for everyone’s benefit.”
Video report: What to expect from Jeremy Hunt’s Spring Budget
Universal credit sanctions regime to be tightened in Jeremy Hunt’s ‘back-to-work’ Budget
The universal credit sanctions scheme is to be tightened in a new push by Jeremy Hunt to get hundreds of thousands of people into work, prompting concern among campaigners.
The requirement for benefits claimants who are lead carers of children to search for work are also to be strengthened, as part of a raft of measures the chancellor will announce on Wednesday in what he has branded his “back-to-work Budget”.
In an overhaul the government claimed was “the biggest reform to the welfare system in a decade”, the Work Capability Assessment – described as flawed by campaigners – is also to be axed.
But it comes as new Office for National Statistics figures showed the number of people off work in the UK due to long-term sickness is the highest since records began in 1993.
Plea for Hunt to support charities in Budget as ‘majority fear for their survival’
Pressure is mounting on Jeremy Hunt to provide targeted support for charities in his upcoming Budget, as new data revealed the extent to which falling donations are failing to keep up with soaring demand.
The chancellor was warned just days ago that half of charities fear they will not survive as the inflation crisis sees the cost of energy, rent and supplies skyrocket.
A group of more than 30 organisations wrote to Mr Hunt last week urging him to issue targeted funding for charities to support with energy costs and to increase payment for governmnet contracts in line with inflation.
‘Distinct feeling of confidence’ contagion won’t spread
London’s top banking stocks like Standard Chartered, Barclays and HSBC had returned to growth on Tuesday after sinking into the red at the start of the week.
The FTSE 100 closed 88.48 points higher, or 1.17%, at 7,637.11.
Other European stocks managed to rebound after seeing even greater declines than the UK, with the German Dax moving 1.83% higher and the French Cac up 1.86%.
US investors started the day’s trading on a positive note, with the S&P 500 up 1.2% and Dow Jones up 0.65% when European markets closed.
Joshua Mahony, senior market analyst at online trading platform IG, said: “Market sentiment appears to have a turn for the better today, with equities throughout Europe and the US moving higher despite ongoing concerns over the health of the banking sector.
“The demise of Silicon Valley Bank brought concerns of further contagion throughout regional banks, leading to widespread calls over who could be the next to fall.
“However, while there are likely to be others which will have to write down bond market investments, parallels to the global financial crisis should be limited.
“With US banking stocks seeing widespread gains, there is distinct feeling of confidence that we will not see widespread issues arise throughout the financial sector.”
The pound slipped on Tuesday and was down by around 0.3% to 1.215 against the US dollar and down 0.1% to 1.1341 euros by the time markets closed.
