Budget 2020 without the boring bits

Picture of trees silhouetted against blue storm clouds

Stormy times ahead

Yesterday, I listened to the Budget speech so you don’t have to. 

But if you’d like to recreate the 2020 Budget experience, just shout ‘getting things done’ on repeat, and throw money at a wall.

Animated gif od a man throwing out loads of bank notes

Chancellor of the Exchequer in action

Because that pretty much sums up Rishi Sunak’s speech, as he ripped up the austerity rule book and shovelled £30 billion (yes, billion) into shoring up the economy against coronavirus. Plus spending like it’s going out of fashion on big projects like roads, housing and flood defences.

Previous post: 11 tips to protect your personal finances from coronavirus

Yup, it’s Christmas come early for fiscal loosening, which sounds like a dodgy disease in itself.

Getting down to brass tacks, here are the highlights that might actually put pounds in your pocket:

Claim sick pay sooner

  • Qualifying workers will be able to claim statutory sick pay (SSP) from day 1 of contracting coronavirus/being advised to self-isolate/taking time off to care for people who have self-isolated, rather than waiting until day 4.
  • Trouble is, £92.45 a week in SSP isn’t much to live on.
  • Plus, you can’t claim SSP if you’re off work because schools and nurseries close and you have to look after your kids.
  • Get a sick note by calling 111, rather than rocking up at the doctor’s surgery.

Previous posts: How to slash your budget to the bone and How to find money in a hurry before pay day

Self-employed? Back to benefits

  • Self-employed or don’t earn enough for statutory sick pay? You’re stuck with Employment and Support Allowance (ESA) or Universal Credit
  • ESA sick benefit will be available from day 1 not day 8, but only pays out a maximum of £73.10 a week.
  • Self-employed will have more chance of claiming Universal Credit because the Government has temporarily ditched the ‘Minimum Income Floor’.
  • Won’t have to visit a Job Centre to claim – good thing too,  if people are confined to their homes due to coronavirus.
  • Scaling back a couple of the nastier aspects of Universal Credit: from October 2021, anyone taking out an advance payment will be able to pay it back over two years rather than one, meaning they hang on to more of their monthly benefits.
  • Plus, the maximum that can be deducted from Universal Credit will be cut from 30% to 25%.
  • Councils will also be able to tap into a £500m hardship fund, mostly to help provide Council Tax relief.

Pocket more by paying less National Insurance

  • The Chancellor has pushed up the point when we start paying National Insurance contributions, from £8,632 to £9,500 a year, starting next month.
  • Works out as a typical tax cut of £104 a year for employees and £78 for the self-employed. Whoop de doo.

Bigger gas bills

  • Throwaway reference to freezing electricity levies but adding a new green gas levy – which could push gas bills up £5 a year.

Stash more for your kids

  • Maximum contribution to Child Trust Funds and Junior ISAs will be more than doubled from £4,368 a year to a chunky £9,000, so parents able to afford it can stash more for their offspring to blow at 18.
  • Borrowing a phrase used when reviewing one of my Telegraph articles: “All the little Tarquins will be rubbing their hands in glee”.
  • But the adult ISA limit stays at £20,000 a year, which let’s face it, is plenty generous for most of us.

Shrinking Premium Bond prizes?

  • The Government has slashed how much they want to rake in from National Savings & Investments (NS&I) next year, from £10.1 billion to £6 billion.
  • As NS&I has only just announced loads of interest rate cuts, there’s zip all chance rates might creep back up
  • Seems likely to mean further cuts on popular products, like the prize fund on Premium Bonds.

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High earners get to plough more into pensions…

  • Previous attempts to shrink tax relief on pension contributions by the highest earners backfired badly.
  • Faced with nasty tax bills, GPs and NHS consultants started turning down shifts, or retiring altogether.
  • With the corona virus looming, the Government sensibly decided they wanted as many doctors on deck as possible.
  • Unfortunately, rather than scrapping the regulations, Rishi just pushed up the thresholds by £90,000…
  • ….then shrunk the amount high earners can pay-into-a-pension-each-year-and-still-get-tax-relief down to £4,000 a year. 
  • As this is only becomes relevant to those earning £200K+ a year, I won’t labour the nitty gritty. But if you’re one of the 250,000 affected and fancy a little light bedtime reading, knock yourself out googling ‘tapered annual allowance’.
  • Oh, and the maximum you can build up in a pension without facing tax charges, known as the ‘Lifetime Allowance’ gets pushed up from £1,055,000 to £1,073,100. So that’s nice for anyone likely to have a million pounds plus in their pension pot.

…but the lowest earners just get a consultation

  • I get why the Government wanted to fast track senior NHS staff back to work asap, really I do. I’m just gutted the Government hasn’t done more for more than 1.3 million of the lowest earners who get stiffed on their pensions.
  • Normally, the big appeal of pensions is the FREE MONEY added in tax relief. Put in £1, get 25p added in tax relief, lovely jubbly.
  • But people who earn enough to be auto-enrolled in a work pension (£10K/year) but not enough to pay income tax (£12.5K/year) don’t get that tax relief if their pension payments are whipped out under a ‘net pay’ arrangement. Meaning some of the people who can least afford it miss out.
  • So no magic wand, just a ‘call for evidence’ on the issue, and no chance of righting this wrong before April 2021 at the earliest.

Cheaper tampons!

  • Yup the 5% VAT on tampons and other ‘sanitary protection products’, previously classed as luxury (!) items, is finally being scrapped. Hallelujah.

Drowning our sorrows

  • Duty on wine, beer, cider and spirits is frozen, so we can binge drink our way through the pandemic. Cheers!

Fuel duty freeze

  • Fuel duty is frozen yet again, great if you drive a particularly gas-guzzling car
  • Plus assorted handouts for potholes, road improvements, a tunnel by Stonehenge and £500 million over five years towards more charging stations for electric cars.

Money for rough sleepers, funded by the jet set

  • £650 million to help rough sleepers – neatly funded by charging overseas buyers of UK property an extra 2 percentage points in stamp duty.  

Small business? Bingo! Cash in on the mega coronavirus giveaway

In an attempt to stop small businesses dying in droves due to coronavirus, stand by for a shower of cash:

  • Eligible for small business rates relief? Grab a £3,000 cash grant!
  • Rateable value less than £51,000? No business rates for a year, for those likely to be hardest hit when people stay home, such as small shops, cinemas, restaurant and music venues, plus museums, galleries, theatres, nightclubs, gyms and small hotels! (Actually, this is a saving not to be sneezed at, as it’s worth up to £25K for each business)
  • Discount on business rates for pubs will be hitched up from £1,000 to £5,000.
  • Stitched by paying shedloads of statutory sick pay? If you have less than 250 employees, the Government will cover the cost for the first fortnight!
  • Can’t afford your tax bill? You get a whole dedicated helpline to discuss paying late!
  • Desperate to borrow because sales have shrunk? The Treasury’s magic money tree is splashing out £2.2 billion on a grant scheme for small businesses!
  • Plus the Government has whipped a £1.2 billion Coronavirus Business Interuption Loan Scheme out of the hat, to support lending to small and medium sized firms.


Now – over to you. Any Budget highlights for you? Or too busy hunkering down against coronavirus to think about anything else? Do share in the comments, I’d love to hear!

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The contents of this blog are for information and ideas, and should not be viewed as financial advice. Use of the material is conditional on there being no liability for how you choose to use it. If you are unsure about any investments or financial issues, please contact a financial adviser.