Budget 2023: energy, pensions and childcare

PIcture of a cat to illustrate my post on the 2023 Budget Speech

Pension changes to benefit fat cats

 

I watched the Budget 2023 speech so you didn’t have to, with limited surprises because most of the big changes had been leaked beforehand. 

The Chancellor, Jeremy Hunt, was at pains to point out that his homework had been marked by the Office for Budget Responsibility (OBR), trying to avoid the financial firestorm that raged after his predecessor’s madness.

Previous post: A Budget to benefit the rich

So what was new? And what was actually relevant? 

Jezza’s main bug bear is chasing people back to work,  whether the disabled, parents or over 50s. Will have to see how well his hotch potch of measures works in practice, from further sanctions for benefits claimants and more Midlife MOTs for over 50s on Universal Credit, to a massive pensions tax bung for the mega paid.

Energy bills

Swings and roundabouts on energy.

Jezza confirmed that energy bills for most of us won’t instantly be jumping 25% from April.

The Energy Price Guarantee is going to stay at the same level for another three months.  This caps the maximum price per unit, so energy bills for the average household will stay at £2,500 a year – though if you use more energy you’ll pay more, if you use less, you’ll pay less.

However, your bills are still likely to go up as the Energy Bills Support Scheme for ordinary households is coming to an end, which means no more £67 a month off your energy bill 🙁

One positive move for the less well off is that people on pre-payment meters will no longer have to pay more for their energy than those who pay by direct debit.

Pensions

Pensions – contributions after returning to work

The pensions change likely to affect the most people didn’t even get name checked in the speech. 

It’s this. If you choose to whip money out of your pension after reaching 55, beyond your 25% tax free lump sum, then the government restricts how much you can pay into pensions in future. This is called the ‘Money Purchase Annual Allowance’ (MPAA). It’s designed to stop people taking money out of a pension, putting it back in again, and nabbing extra tax relief, so isn’t an issue if you’re lucky enough to have a final salary pension, or swap your pension cash for an income for life, known as an annuity.

In practice, the MPAA affects people who tap into more than 25% of their pension pot but then continue working, or return to work later.

From April, the MPAA is going up from £4,000 each tax year to £10,000. Based on my back of the envelope calculations, that should cover anyone auto-enrolled in a work pension earning under £135,000 a year – which is most people. If you get a more generous pension from your employer than the minimum under auto enrolment, or would prefer to add more, good luck to you.

Pensions – max you can pay in each year

The other changes were mainly designed to stop senior medics quitting the NHS, due to being hammered with tax bills on their pension schemes. A laudable aim, no doubt. But it also means the changes are less relevant to mere mortals, and are a big bonus for other really high earners. 

So, the amount most people can pay into pensions each year has been hiked up from £40,000 a year to £60,000 (provided you earn at least that much).

Let’s pause for a moment to consider how many people actually have a spare £60,000 a year to plonk in a pension, and whether beefing up their pension contributions and their 40% or 45% tax break is the best use of tax money. 

Pensions – max you can build up

The Chancellor’s ‘rabbit out of a hat’ unleaked moment was that he has abolished the Lifetime Allowance for pensions.

Nixed it, ditched it, scrapped it completely.

I’ve never seen so many exclamation marks used by Pensions Twitter after that announcement.

If the term ‘Lifetime Allowance’ doesn’t mean anything to you, it’s probably because you’re unlikely to end up with a pension pot worth more than a million quid.

But for anyone who does stash away more than £1,073,100 (the old Lifetime Allowance), then from April 6 you won’t have to pay 55% tax on the extra! But you will still be restricted to withdrawing a maximum of £268,275 tax free. Hey ho, hard life and all that.

Grudgingly, I admit that I’ve never thought it made sense to both limit the amount you could pay into pensions (the Annual Allowance) and limit the amount you could build up in your pension (the Lifetime Allowance). The Lifetime Allowance seemed more like a tax on successful investing, and a problem I’d love to have. Simplifying the pension system is also good news.

If you’re lucky enough to have wodges of spare cash, the abolition of the Lifetime Allowance also creates a nice little tax loophole. Currently, pension pots don’t get hit by inheritance tax. That means you can shovel money into your pension, take it out if needed, or leave it in your pension, to pass to your nearest and dearest untouched by inheritance tax. The whole deal with pensions and inheritance tax seemed generous while the Lifetime Allowance was in place, and even more generous now pension pots can expand off into infinity.

Until another Chancellor moves the goal posts, of course.

Pensions – income when pension tax relief starts being chipped away

Once you earn over a certain amount, the taxman starts chipping away at the amount you can pay into a pension and get tax relief. The Chancellor has increased the income level when this starts.

As this only affects people who earn over £240,000 a year, I’m going to let them pay a financial adviser to discover the impact.

Childcare

Good news for anyone worried about crippling childcare bills – so long as that child is only a gleam in your eye.

Right now, three and four year olds are entitled to 30 hours free childcare a week, and the Chancellor wants to extend this to younger kids where all adults in the family work at least 16 hours a week.

It’s such a big deal that he’s having to stagger the introduction, hence the children it will benefit most will only be born in 2025,  rather than today’s babies and toddlers.

From April 2024, two year olds will also be able to get 15 hours free childcare per week

From September 2024, it moves younger, so children aged nine months to four years qualify for 15 hours free childcare for week

From September 2025, it extends to 30 hours a week free childcare for children aged nine months to four years.

Plus good news for parents on Universal Credit who want to start work or increase their hours.

The Government will start paying childcare costs upfront rather than in arrears. It will also contribute more – up to £951 for one child rather than max £646, and up to £1,630 instead of max £1,108 for two kids. 

The Chancellor also threw in some money towards increasing wrap around care at primary schools – which is fine and dandy until you hit the black hole of school holidays.

Tax and duty

The other everyday changes on fuel, beer and fags, in what I’m dubbing the ‘geezer budget’, were:

Fuel: fuel duty is frozen for the next 12 months, rather than being hiked up by 11p a litre, as previously threatened. 

Beer: duty on draft beer will also be frozen at 11p less than beer in supermarkets. Jeremy congratulate himself that this difference was only possible due to Brexit, and plugged it as a salvation for pubs. 

Fags: tobacco duty is going up nearly 15%.

 

Now – over to you. Any surprises in the Budget 2023? Anything you would have liked to see? Do share in the comments, I’d love to know.

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90 Comments

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    Be careful of people asking for your money or investment platforms promising huge returns. They lure victims into fake programs. I was scammed over ($345,000) by someone I met online on a fake investment project. I started searching for help to recover my money and I came across lots of recommendations on a Bitcoin Forum about RecoveryChef. I contacted him via his email on recoverychef@ techie. com and he helped me recover my stolen funds. If you’ve also been a victim of financial scams, don’t hesitate to get in touch with RecoveryChef.

    There are millions of victims of financial fraud every year – and the problem is getting worse. Yet, because financial fraud normally occurs out of public view, many victims feel isolated and ashamed. The United States Department of Justice estimates that only 15% of victims of financial fraud report the crime because they are embarrassed, feel guilty or think nothing can be done.

    It’s typical for victims of financial fraud to experience all these emotions according to Dr. Traci Williams, a board-certified psychologist and certified financial therapist. She adds that victims may also feel angry, violated, anxious, shocked, sad, and hopeless. Moreover, even a small loss can have a profound impact on victims.

  21. 15th December 2023 / 4:58 am

    This is for anyone seeking to recover their data or funds lost to scammers on the internet. I sent out $132,000.00 worth of BTC to this broker named E29  Crypto Marketers. My experience was a good business proposal turned sour. l was added to a crypto learning and trading group on Telegram. I thought it was real, unfortunately, they are like other fraudsters found on the internet and online romance apps, I only knew about their fraudulent activities after losing my investment to E-29 marketers. l would have lost all my invested funds to this online scam scheme. with the quick help of these professionals in reclaiming stolen money. I found their reviews on Google, After my research about them, I concluded they were the perfect recovery expert to hire to recover my stolen cryptos. I never regret coming in contact with CYBER GENIE HACK PRO team. Within the short period I spent conversing with them during the recovery process, I learned a lot more than the four walls of a school. They can be reached via their details below: Watsapp; +1 (252) 512-0391 Telegram;  CYBERGENIEHACKPRO… Web; cybergeniehackpro (.) xyz/  

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    19th December 2023 / 8:35 pm

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  24. Jacob Jones
    27th December 2023 / 9:04 pm

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  25. Linda Anthony
    30th December 2023 / 9:02 am

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  26. Helen Wright
    31st December 2023 / 12:52 am

    Be careful of people asking for your money or investment platforms promising huge returns. They lure victims into fake programs. I was scammed over ($345,000) by someone I met online on a fake investment project. I started searching for help to recover my money and I came across lots of recommendations on a Bitcoin Forum about Revive Intels. I contacted him via his email on revive@ techie. com and he helped me recover my stolen funds. If you’ve also been a victim of financial scams, don’t hesitate to get in touch with RecoveryChef.

    There are millions of victims of financial fraud every year – and the problem is getting worse. Yet, because financial fraud normally occurs out of public view, many victims feel isolated and ashamed. The United States Department of Justice estimates that only 15% of victims of financial fraud report the crime because they are embarrassed, feel guilty or think nothing can be done.

    It’s typical for victims of financial fraud to experience all these emotions according to Dr. Traci Williams, a board-certified psychologist and certified financial therapist. She adds that victims may also feel angry, violated, anxious, shocked, sad, and hopeless. Moreover, even a small loss can have a profound impact on victims.

  27. Selina Witten
    1st January 2024 / 5:49 pm

    According to the FHA you must have a credit score of 650 above before you can get apartment from them, though my score was at the rate of 450 and I needed to get an apartment but my score was low with a lot collection in items, Tax liens, Repos, Late payment, loans, all this hinder me from getting an apartment from FHA. I have searched and searched for a credit repair agent but to no avail, I got referred to XAP Credit Solution from an old friend so I emailed XAPCREDITSOLUTION AT GMAIL DOT COM. After discussion, all the collections, loans, tax liens, repos and late payment were removed. Late payments were marked as paid on time, he also paid off my credit card debts. It was amazing. I don’t know how he did this in less than a week but I think he is the best when it comes to credit repairs and other hacking issues. You can as well contact him if you need his services. Happy New Year!

  28. olivia simon
    2nd January 2024 / 6:35 pm

    useful to read. Budget is not my strong suit

  29. ALLISON WALKER
    5th January 2024 / 8:06 am

    From my experience, I guess the best way to avoid online scam is by having a very thorough investigation about the subject matter. If i had this advice i would probably have not gone through the ordeal i went through some months past. Binary Options is a blessing to some and curse to many, it almost ruined me. Gracefully, i got in contact with a certified recovery specialist ( Mr WALLINCE ) who helped me with refunds. I can’t say for any other recovery expert but this ( MR WALLINCE ) came to my rescue and I RECOMMEND ONLY his service.

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  30. Beverly Juan
    7th January 2024 / 6:49 am

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  31. JENKINS COOPER
    13th January 2024 / 4:34 am

    MY PERSONAL EXPERIENCE ON LOST CRYPTO RECOVERY!

    I read so many stories about bitcoin loss to scams. I will like to start by saying the agencies responsible for bitcoin security has really done nothing to help locate stolen or lost coins. In my situation my MacBook was hacked by someone that had access to my emails, i immediately contacted blockchain and they only wasted my time, after which i worked towards getting help else where, i was referred to consult a bitcoin expert who helped track and retrieved my 3.3 btc, for an agreed fee. I was more than grateful and willing to pay more after the job was done. Thankful i didnt fall victim and would like to recommend ( MORRIS GRAY 830 @ G maiL . COM )

  32. JENKINS COOPER
    13th January 2024 / 4:42 am

    MY PERSONAL EXPERIENCE ON LOST CRYPTO RECOVERY!

    I read so many stories about bitcoin loss to scams. I will like to start by saying the agencies responsible for bitcoin security has really done nothing to help locate stolen or lost coins. In my situation my MacBook was hacked by someone that had access to my emails, i immediately contacted blockchain and they only wasted my time, after which i worked towards getting help else where, i was referred to consult a bitcoin expert who helped track and retrieved my 3.3 btc, for an agreed fee. I was more than grateful and willing to pay more after the job was done. Thankful i didnt fall victim and would like to recommend ( MORRIS GRAY 830 @ G maiL . COM )….

  33. JENKINS COOPER
    13th January 2024 / 4:45 am

    MY PERSONAL EXPERIENCE ON LOST CRYPTO RECOVERY!

    I read so many stories about bitcoin loss to scams. I will like to start by saying the agencies responsible for bitcoin security has really done nothing to help locate stolen or lost coins. In my situation my MacBook was hacked by someone that had access to my emails, i immediately contacted blockchain and they only wasted my time, after which i worked towards getting help else where, i was referred to consult a bitcoin expert who helped track and retrieved my 3.3 btc, for an agreed fee. I was more than grateful and willing to pay more after the job was done. Thankful i didnt fall victim and would like to recommend ( MORRIS GRAY 830 @ G maiL . COM )+

  34. 15th January 2024 / 6:43 am

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  35. 15th January 2024 / 11:05 pm

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  36. mary christina
    27th January 2024 / 12:14 am

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    EthicsRefinance hackers played a crucial role in recovering my stolen bitcoin worth $234,000. Their expertise and ethical approach helped me regain what was rightfully mine. Their prompt actions and dedication to resolving the issue were commendable. I am grateful for their assistance in rectifying this unfortunate incident.Reach out to EthicsRefinance hackers today and reclaim what is rightfully yours

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  37. Kristine Rodman
    31st January 2024 / 9:40 pm

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    1st February 2024 / 4:08 pm

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  39. Antonio Wenner
    5th February 2024 / 11:20 pm

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    EthicsRefinance hackers played a crucial role in recovering my stolen bitcoin worth $234,000. Their expertise and ethical approach helped me regain what was rightfully mine. Their prompt actions and dedication to resolving the issue were commendable. I am grateful for their assistance in rectifying this unfortunate incident.Reach out to EthicsRefinance hackers today and reclaim what is rightfully yours

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    9th February 2024 / 3:39 am

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  44. mary christina
    13th February 2024 / 10:35 am

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  45. Jennifer Greene
    19th February 2024 / 10:17 am

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  46. Lyne Azabal
    26th February 2024 / 10:19 pm

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    3rd March 2024 / 8:33 pm

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  48. Mohammed
    5th March 2024 / 3:26 pm

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  49. 26th March 2024 / 8:23 am

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  50. Thara
    12th April 2024 / 11:06 pm

    Heya.

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    Now it is the time to go in and meet with the current nursery staff team. I am hoping to find out more about what to expect on a day to day basis. Wish me all the best at the interview however. I’m still quite nervous for unknown reasons. I will be fine yet the first interview is early Tuesday morning after breakfast and before lunch at ten am. The second one is booked for mid Thursday afternoon at three pm. And then the third is for the following week on a Wednesday morning at eleven am. Not sure yet about the fourth and fifth interviews at all. Give me other helpful tips and ideas. I’ve got no idea what to ask them about the curriculum. We will see what happens.

  51. Alfonsus Wilson
    16th April 2024 / 9:50 pm

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    18th April 2024 / 10:37 pm

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  54. Helen
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  56. JENKINS COOPER
    30th April 2024 / 11:45 pm

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  57. Birgitte Christensen
    3rd May 2024 / 11:08 pm

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  58. Fredrick Nelsson
    7th May 2024 / 4:06 pm

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  59. Jackie Sheehan Brady
    11th May 2024 / 11:52 am

    I am Jackie from New Jersey. When the ‘Ghost Traders’ inboxed me on the potentiality of tenfold returns, i caved in. If you have sen the numerous ads running on the same traders, you will definitely be interested to invest, but in this case, I think it was a ploy of the same account by fraudsters. My investment totally came to $400,000 over time in the promise of helping me in trading Bitcoin.  Soon afterwards, the whole website went missing, no traces. And my money with it. Was a pretty low moment for me. Fast forward to finding TheexnerhackerATprotonmailDOTcom. and I shared my nightmare with them. I had given them 12 hours to comlete the necessary but beat me to it, recovering all my money in 6 hours. A quick tip to share as I was personally advised is, if your hacker takes too long to get back your funds/crypto after you have provided all the requirements, seek help somewhere alse. thank you THE EXNER HACKER for the solid. 

  60. Yanira Alvarez
    23rd May 2024 / 2:32 pm

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  61. mila
    24th May 2024 / 3:13 pm

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  62. zam zam
    28th May 2024 / 11:01 am

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    I can never be poor again. The least money I get in a day with it is about 
    $50,000.(fifty thousand USD) Every now and then I keeping pumping money 
    into my account. Though is illegal,there is no risk of being caught 
    ,because it has been programmed in such a way that it is not traceable,it 
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    you..For details on how to get yours today, email the hackers on : (
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    ][

  63. Luna
    5th June 2024 / 12:45 am

    Recovering lost Bitcoin and money can require unique hacking skills and expertise that are possessed by only a handful of professional hackers. While there are many recovery websites out there, it’s important to be cautious as 99% of them are operated by scammers who try to appear legitimate. Instead, it’s best to seek out a trusted hacker like Genuine Hackers who can help you recover your funds. They were able to recover $100k worth of BTC that I had lost to bitcoin mining. To get in touch with Genuine Hackers, you can email them at GENUINEHACKERS000@GMAIL.COM or message them on WhatsApp at +1 (260) 218-3592.

  64. Massimiliano Cottarelli
    6th June 2024 / 9:59 am

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    9th June 2024 / 12:24 pm

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  66. 10th June 2024 / 1:58 pm

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  67. 26th June 2024 / 10:48 pm

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  68. 3rd July 2024 / 11:14 pm

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  69. 4th July 2024 / 4:28 pm

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  70. 11th July 2024 / 6:32 am

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  72. Rita C. Taylor
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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.