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Seven Spring Budget predictions from tax, pensions, fuel and alcohol - and what the changes could mean for you
14 March 2023, 10:34 | Updated: 14 March 2023, 10:36
Chancellor Jeremy Hunt will deliver the Budget tomorrow with pressure to cut taxes as millions of Brits grapple with the increasing cost of living.
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But major changes to income tax and national insurance are unlikely as the chancellor seeks to balance the books, with the government aiming to tackle rising inflation before any significant tax cuts can be announced.
When is the Spring Budget?
Mr Hunt will deliver his statement in Parliament on Wednesday March 15. The statement will come after PMQs at around 12.30pm. Here are seven predictions for what the statement could contain:
1 Energy bills support
The Government’s Energy Price Guarantee, which caps energy costs for households, is scheduled to rise from £2,500 to £3,000 on April 1. The Chancellor is expected to keep it at that level for another three months, from April to July.
From July, when the price guarantee ends, it's expected bills will fall to £2,000 as wholesale gas prices fall.
The Chancellor is understood to be looking at increasing the lifetime pension allowance (LTA) to try to encourage more people to work for longer.
Jeremy Hunt is considering allowing workers to put more money into their pension pot before being taxed as part of his Budget package.
Mr Hunt is keen to bolster Britain's workforce as he looks to deliver on the Prime Minister's pledge of growing the UK's stalling economy.
The lifetime allowance currently stands at £1.07 million, with savers incurring tax after that personal pension pot threshold has been exceeded.
The Times said the Chancellor would hike it to £1.8 million, while The Daily Telegraph said it could be set to more than £1.5 million.
3 Getting long-term sick back to work
The Chancellor is reportedly planning a so-called ‘sick note crackdown’ - with a focus on getting long term sick people back into work with the support they need, rather than being signed off work.
They also want to change the benefits system so that sick people who work part time can still claim some sickness benefits.
4 Public sector pay
The government wants to strike deals to end the ongoing issue of strikes in public services.
They may look at coming back to unions with stronger pay deals for 2023/24 and it is widely expected that Mr Hunt will look at ways to drum up more cash to avert public sector walkouts.
5 Fuel duty cuts
In April, fuel duty will rise in line with RPI inflation, adding 7p to the price to a litre of fuel. The temporary 5p fuel duty cut announced by Rishi Sunak in March 2022 expires in March.
This means fuel is set to rise by an extra 12p per litre.
It is expected Mr Hunt will step in to stop this to give motorists a further break at the pump - with continued cuts to fuel duty expected to cost the Treasury an estimated £6bn according to Deutsche Bank.
6 Corporation tax
Tax paid by businesses is expected to rise from 19% to 25% in April. This hike was scrapped in Kwasi Kwarteng’s disastrous mini-Budget last September as part of a tax cutting spree that triggered an economic meltdown.
The rise is expected to go ahead.
7 Cigarettes and Alcohol
The price of a pack of cigarettes is expected to rise by £1.15 in line with RPI at tomorrow’s Budget. However booze duty is expected to be frozen until August.
The chancellor is keen to bolster Britain's workforce as he looks to deliver on PM Rishi Sunak's pledge of growing the UK's stalling economy.
A key pledge of the Budget tomorrow is expected to be an increase to the lifetime pension allowance (LTA), which currently stands at £1.07 million, with savers incurring tax after that personal pension pot threshold has been exceeded.
The Times said the Chancellor could hike it to £1.8 million, while the Telegraph said it could be set to more than £1.5 million.
It is also understood that the Budget could see the annual allowance rate for pensions increased, with Mr Hunt having asked advisers to calculate how much a change would cost the exchequer.
Rachel Johnson says childcare should be a top priority in Jeremy Hunt's upcoming budget.
Mr Hunt vowed to consider fiscal measures that would help the over-50s who had taken early retirement during or after the pandemic to return to work during a speech earlier this year.
Speaking in January, he said employment levels were lower than they were before the coronavirus pandemic by around 300,000 people.
"So, to those who retired early after the pandemic, or haven't found the right role after furlough, I say: Britain needs you," Mr Hunt said.
"And we will look at the conditions necessary to make work worth your while."
The pension lifetime allowance was first applied in 2006, when it was set at £1.5 million. It rose to a peak of £1.8 million by 2012 before gradually being cut.
It was due to stay at £1.07 million until 2026 but Mr Hunt could choose to bring a change forward.
Jeremy Hunt thought it was a 'hoax' when he was asked to be Chancellor
The Treasury said it does not comment on Budget speculation.
Meanwhile, the Chancellor has confirmed that £63 million will be made available in his Budget to help public swimming pools stay open in the face of high energy bills.
More than £20 million of the one-year fund will be made available in grants to leisure centres with pools that are dealing with immediate cost pressures, while £40 million is earmarked for investment in decarbonisation and long-term energy efficiency measures.
The Treasury said leisure centres with swimming pools are responsible for up to 40% of local authority carbon footprints due to the need for bathing waters to be heated to safe temperatures.
Mr Hunt said: "Soaring bills are hitting us all hard, and community pools have been thrown in the deep end. "I know they are loved by millions of people. This vital lifeline will keep them afloat."