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The next year is to bring about a financial change after a post covid UK. It is set to bring the economy back to a pre covid level at the end of the year.

So, what could that mean in terms of finance?

  • We could see the annual growth set to rebound by 6.5% this year followed by a further 6% in 2022
  • Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year.
  • Borrowing as a percentage of GDP will then fall in the following four years to 1.55
  • National living wage to increase next year by 6.6% to £9.50 an hour
  • £24bn earmarked for housing, including £11.6bn for up to 180,00 affordable homes, with brownfield sites targeted for development
  • Landlords welcome CGT freeze in budget as Chancellor decide against rise

But what does that mean for your money?

With the minimum living wage increasing for all ages from April 2022. We could see it increase as follows:

  • 21 to 22 year olds: from £8.36 to £9.18 per hour
  • 18 to 20 year olds: from £6.56 to £6.83 per hour
  • 16 to 17 year olds: from £4.62 to £4.81 per hour
  • Apprentices: from £4.30 to £4.81 per hour

When this happens the national living wage will be in line with the real living age of £9.50. This is calculated based on the cost of living and employers can choose to pay if they wish.

Unfortunately for those under the age of 23, their wages won’t match this. It is possible with inflation the real living wage will soon increase further.

Despite this, it could still mean that your money won’t go as far because of inflation. It could also mean that if your pay doesn’t rise by the same amount, you will in effect have had a pay cut.

Whilst that is definitely something to frown about the pledge of £1.8bn to build new homes in England is not. The homes will be built on areas that were previously developed but not currently in use. This means potential for first-time buyers to invest in their first property.

This scheme has a lot in common with the starter homes initiative that was announced back in 2015. However, the starter homes was cancelled in 2020 before a single home was built. Hopefully, this new scheme won’t face the same fate.

With property having faced a recent boom in buying we could see pricing on property plummeting in the coming months due to the recent rush.

On another note, portfolio buy to let landlords have breathed a sigh of relief as the chancellor decided not to increase the capital gains tax. There were concerns in the buy to let sector that a tax increase would prove a tipping point for landlords and prompt them to sell their portfolios.

As this is an already undersupplied market it would have proven disastrous for the growing demand. On the plus side, landlords can now take advantage of this and look at potentially increasing their portfolios.

There are some good points to this recent budget and depending on if you’re a business owner some not so great points due to tax increase. That being said, the coming months will prove an interesting outcome as we enter a post covid world.

 

Further information on this can be found by clicking the links below:

Autumn Budget 2021: Key points at-a-glance – BBC News

https://www.which.co.uk/news/2021/10/autumn-budget-2021-what-will-it-mean-for-your-money/

https://www.ft.com/content/c3531f48-6640-4c9b-bdef-459291c3c580

https://www.thisismoney.co.uk/money/news/article-10135941/AUTUMN-BUDGET-2021-BRIEF-key-points-Chancellors-financial-statement-glance.html