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8 March 2017, 14:27
Martin Lewis Reviews Budget 2017
MoneySavingExpert's Martin Lewis is one of the country's most-trusted names in helping you save money. Speaking to LBC, he picked out the top five key announcements in Chancellor Philip Hammond's budget.
"We have confirmation of the launch of the new tax-free childcare. Currently, you have the childcare vouchers system, where if your employer offers it, you can pay for childcare from pre-tax income. So effectively, £300 gained per £1,000 spent on childcare. But of course, the self-employed, who were hit in this budget, don't get that.
"The tax-free childcare system means that if you put in £8,000 per child into a savings account, over the year, the government will increase it up to £10,000. It works out at 25%, if you put less in, they will add it, to be used on childcare. Anyone earning under £100,000 where you are both working will be able to get it.
"The big key is that for the first time the self-employed will get a tax break on childcare in most circumstances. That is starting to be rolled out next month and will be completed by the end of the year."
Help For Your Personal Finances: The NS&I Bond
"This bond, which was pre-announced in the Autumn Statement, pays 2.2% on £3,000. It's a nice interest rate, but it's only about £66 per year.
"Interestingly, when he announced it in the Autumn Statement, the best three-year bond on the market for general savings providers was 1.6%. Today, Atom Bank is paying the same 2.2%. So it's market-leading, but it's not market outperforming.
"That's starting next month. It's not big money, but from the personal finance perspective, there is something in there."
And One Key Thing He Didn't Mention...
"The one thing he didn't mention - and I think that's because they are worried it's going to be a damp squip - is the LISA, the Lifetime ISA, which enables under 40s to put in up to £4,000 per year and then it can be used either on retirement savings when you turn 60 or as a first-time buyer and you get that 25% added on top to what you put in.
"The problem is, the only people who are currently saying they will offer one when it starts on 6th April are Investment ISA providers, no Cash ISA providers and the banks are saying they probably won't be there.
"This is their major new project. They are testing to see if they can replace pensions by this Lifetime ISA, as well as helping first-time buyers. It's going to overtake the help-to-buy ISA.
"It's only a month and a half away, but not a mention. And that, I suspect is fear that the financial services industry isn't supporting this."
Bad News For The Self Employed
"He did hit the self-employed as we predicted, but not as hard as people thought he might. There's an extra £145m-worth of taxes."
Business Rates Softening
"There was a bit of softening over the big kerfuffle over business rates and the revaluation that has gone on there. The revaluation is going ahead, but there's a softer landing, especially for some smaller businesses."