The Chancellor Rachel Reeves announced a series of changes to government spending and economic growth. From wage increases to tax changes, there's a lot to unpack. Here's a breakdown of the main points and how they might affect you:

‍

Wage Increases

One of the headline announcements is the increase in the minimum wage.

• Minimum Wage Increase: From April 2025, the minimum wage will rise by 6.7%, meaning you'll earn from £11.44 to £12.21 an hour.
• Increase for 18-20 Age Group: A significant 16% increase will see wages reach £10 per hour.
• Apprenticeship Wage Boost: Apprentices will experience the largest increase, with hourly wages rising from £6.40 to £7.55.

‍

What does this mean for you? Simply put, more money in your pocket. It's a significant increase that can help you manage living costs more effectively, enabling you more room to save or spend on essentials and wants.

‍

Tax Changes

While there won't be any income tax, National Insurance, or VAT increases, there are changes to National Insurance contributions for employers, which could indirectly affect your job opportunities. The threshold at which employers will begin paying National Insurance contributions for its employees is reducing from £9,100 to £5,000. However, the Employment Allowance rise means more employers won't have to pay National Insurance, potentially freeing up funds for hiring.

‍

How does this affect you? This could lead to more job openings, especially in smaller businesses, as they may find it less financially burdensome to hire new staff.

‍

Transport and Fuel Duty Freeze

Good news for your transport costs! Single bus fare cap applied to many routes in England will be raised from £2 to £3 until December 2025. The fuel duty will also remain frozen, which means no additional taxes on petrol next year. This helps keep your travel expenses stable, whether you're commuting for work or taking weekend trips.

‍

Why is this important? Transportation is a major expense for many young people, and the freeze helps avoid extra costs at the pump, leaving more room in your budget for other expenses.

‍

‍

Household Support Fund

The government has pledged an additional £1 billion to the household support fund aimed at providing assistance to families across the UK. This initiative is particularly designed to help those tackling with financial difficulties, especially during this cost of living crisis where money may not stretch as far as it used to. The fund seeks to reduce some of the pressures that many households face, whether due to rising living costs, unexpected expenses, or other financial strains.

‍

How does this affect you? If you're currently facing financial challenges, this fund could be a valuable resource offering much-needed relief. Keep an eye out for detailed announcements from your local authorities or community organizations regarding how to apply and make the most of this opportunity to aid your household's financial stability during tough times.

‍

Inheritance Tax and Financial Planning

The Inheritance Tax threshold remains frozen until 2030, allowing the first £325,000 of an estate

to be inherited tax-free. This increases to £500,000 if a residence is involved, and £1 million when allowances are passed to a surviving spouse or civil partner.

Why does this matter? Even though this might seem far away, these adjustments ensure that more of your potential inheritance remains tax-free, which can significantly impact your long-term financial planning.

‍

‍

The budget announcement brings several changes that directly impact young consumers, from increased earnings due to minimum wage adjustments to stable fuel costs and tax alterations. The budget announcement is a great opportunity to reassess your budget and future financial plans. If you want to read the full list of announcements made by the Chancellor, read the government's document here.