Jeremy Hunt, the Chancellor of the Exchequer, has delivered his Budget, in which he unveiled big changes to pensions and childcare as part of an effort to tempt people back into work.
Here’s our summary of the main announcements:
Pensions
- The lifetime allowance – currently £1,073,100 – to be abolished
- The tax-free annual allowance for pension pots to be raised from £40,000 to £60,000 from April 2023
- Money Purchase Annual Allowance to increase to £10,000 from April 2023
Taxes
- The 5p reduction to fuel duty to be extended for another 12 months
- Duty on draught products in pubs to be up to 11p lower than the duty in supermarkets
Businesses
- Corporation tax to go up from 19% to 25% for companies with over £250,000 in profits
- Every pound invested by businesses in machinery, plans or IT equipment to be deducted in full from taxable profits
- Twelve new Investment Zones to be created, backed by £80m of investment over five years
Childcare
- Thirty hours of free weekly childcare for working parents to be extended to children aged under three
Energy
- Energy Price Guarantee extended for three months until the end of June
- Prepayment meter charges to be brought into line with direct debit charges
Disability support
- Work Capability Assessment to be abolished and a new voluntary employment scheme for disabled people called Universal Support to be introduced
Defence
- Defence budget to increase by £11bn over the next five years
Economy
- The Office for Budget Responsibility (OBR) believes the UK will not enter a technical recession this year
- According to OBR estimates, the UK economy will contract by 0.2% this year, and then expand by 1.8% in 2024, 2.5% in 2025, 2.1% in 2026 and 1.9% in 2027
