Austerity is coming to an end?

J Finance Budget Overview

What does the Budget mean for you? Find out in our simple guide…

The 2018 Budget was announced by The Chancellor, Phillip Hammond, nearly four weeks ago, but now that the major parts have been agreed and there is relative certainty of no dramatic U-turns, below we have tried to highlight the main parts that will be important to our clients.

Budgets are always dependent upon your own personal and economic position. So, whether or not it was a good Budget for you will be defined by your situation.

Whilst there were several good things to come out of the Budget announcement, including an announcement that Philip Hammond will have more money to spend than expected, most of his announcements had already been made. Perhaps the key political if not economic line was: “The hard work of the British people is paying off. Austerity is coming to an end.”

The important bit is ‘coming to an end’ rather than ‘ended’ – “austerity is coming to an end, but discipline will remain.”

There were new announcements for key areas; a new tax on large digital companies, an end to PFI (private finance initiative) projects, extra cash for defence, and money for high streets. Also halving the contribution to the apprenticeship levy for smaller firms and additional money for schools.

Perhaps the most directly felt change for individuals will be the not insignificant raising of personal tax allowances being brought in a year earlier than originally planned.

As mentioned by many commentators in advance, this is a Budget that depends almost entirely on a decent Brexit deal being reached, with Philip Hammond conceding that sudden changes – for example a no-deal departure – would in effect mean a whole new Budget in the spring!

So let’s take a look and remind ourselves of some of the important details:

Pensions and benefits

  • Pension allowances and tax relief were not mentioned in the Budget, but there will be a consultation later this year on the implementation of the Pension Dashboard, and a confirmation that state pension information will be included on it. The Pension Dashboard will allow people to see their pension savings all in one place, making it easier to plan for their retirement.
  • There has been much media coverage over changes in Universal Credit, but the Chancellor has confirmed that the system is set to stay.
  • However, work allowances for universal credit are to be increased by £1.7bn, with claims that 2.4 million working families with children will benefit from change to the tune of £630 per family a year.
  • The Chancellor also announced that an added £1bn was to be made available to help welfare claimants transfer to Universal Credit.

Personal taxation

  • The good news is that the personal allowance threshold will rise in April 2019. This means you won’t pay tax on earnings until they hit £12,500 (up from £11,850). This has come through a year earlier than we anticipated.
  • The higher rate income tax threshold will also rise to £50,000 (up from £46,350). You will pay tax at a rate of 40% on earnings over this figure.
  • The National Living Wage is set to increase by 4.9%, from £7.83 to £8.21 an hour.
  • Scottish rates are different and will be announced in December.

Stamp Duty and housing

  • For anyone struggling to find a home to buy, there are a couple of positives – the first being that the Housing Infrastructure Fund, which has been set up to allow another 650,000 homes to be built, is to benefit from a cash boost of £500m.
  • The Chancellor also announced that first-time buyers who buy shared equity homes costing up to £500,000 would be able to receive first-time buyers’ relief even on the part they are not purchasing. This extension will apply retrospectively from 22 November 2017 onwards.
  • For those who cannot afford to purchase a home, the good news is that there are new partnerships announced with housing associations across England with a view to providing 13,000 homes.

Education and health

  • Education and health provision is something that we all need – whether it is for us or for family, and for anyone who has to care for someone with issues with mental health, the announcement of an extra £2bn a year for mental health services, the establishment of new mental health crisis centres, more mental health ambulances and a 24-hour mental health crisis hotline must be good news.
  • Councils are also to get an extra £700m towards care for the elderly and those with disabilities.
  • And finally, schools are to get £400m for ‘the little extras they need’.

More treats

  • The Chancellor also said the “era of austerity” is finally coming to an end.
  • There are 3.3 million more people in work since 2010 and 800,000 more jobs are forecast by 2022.
  • Wages growth is at its highest for nearly a decade.

If you would like to discuss any potential changes in your financial situation caused by the Budget or any financial matters, we will be happy to help. Please contact us without obligation.


Established in Berkshire in 2004, J Finance Ltd is one of the leading financial planning companies in the area. We serve clients across the South of England including Oxfordshire, Buckinghamshire and Hampshire. If you would like to discuss this subject or any other financial matter, please contact us on 01635 521 300 or email