Every year the papers are splashed with photographs of the chancellor holding up that red suitcase in front of Number 10 with an awkward grin on their face - having just set out the plans for the next financial year. More often than not, what comes out of it is difficult to dissect and apply to our own lives. Here, personal finance expert and founder of SavvyWoman.co.uk, Sarah Pennells, breaks it down…
It was Philip Hammond’s first and last spring Budget (it will move to the autumn this year) and it coincided with International Women’s Day. But how will the Budget affect women?
1. National Insurance hike for self-employed
The rise in National Insurance was the big Budget announcement shock.
In fact, it was such a shock that the Chancellor has since taken a dramatic U-turn on the policy, announcing in a letter to Tory MPs that: “There will be no increases in. . . rates in this parliament.”
The change in policy occurred following a backlash from Conservative backbenchers, who considered the NI hike to be a breach of a manifesto promise that was made by David Cameron on the campaign trail of the 2015 General Election.
Hammond’s original NI hike would have seen an increase of Class 4 National Insurance rates from 9% to 10% in April 2018, and rising to 11% in 2019 which would bring the rate closer to the 12% currently paid by employees- meaning self-employed people would be at a disadvantage.
And an extra 1% on class 4 NI currently costs someone who’s self-employed almost £350 a year.
Government figures show a rise of 88% in the number of people in part-time self-employment between 2001 and 2015, compared to a rise of 25% for full-time self-employment. In all there are over 4.8 million people who are currently self-employed so this change could potentially have affected millions.
2. New fixed rate savings account
You don’t need me to tell you that savings rates are truly abysmal at the moment. But if you want to squirrel some money away, there’s a bit of good news. The chancellor confirmed that a new NS&I fixed rate savings account would pay 2.2% over three years.
The savings account was originally announced in the Autumn Statement last year and the chancellor said he’d confirm the interest rate in the Budget, but since then interest rates on some savings products have begun to creep up. The rate of 2.2% is better than just about anything you can get on the market, but could have been a fraction higher.
You’ll be able to save between £100 and £3,000 in the fixed rate and you have to be 16 or over to have one. It will be on sale next month.
Read more: Why every woman should have a Fuck Off Fund
3. Returnees fund
The government pledged £5 million to identify the best ways to increase the number of women who can return to work in the private and public sector after a career break. I guess £5 million is a start, but it will only make a meaningful difference if employers see the value of women who’ve taken time out of the workplace.
A campaign group called Hire Me My Way says that over half of people in the UK currently work part time or flexibly but only one in 10 job adverts offers this.
4. Domestic violence
Women’s refuges have suffered some savage cuts over the last few years, with figures from Women’s Aid showing that 17% of women’s refuges in England and Wales have closed since 2010.
The Budget announcement of an extra £20 million – over the lifetime of parliament – will help. But it’s not enough to give refuges the funding they need. The bigger problem is that refuges rely on local authorities for their funding and it’s generally not ring fenced. As local authorities are under such pressure, funding for domestic violence services is often cut.
5. £2 billion for social care
Social care is at a crisis point and the chancellor has promised an extra £2 billion (£1 billion of that from April) to help. But that’s not enough to plug the gap. As much as £2.8 billion a year is needed to plug the gap.
6. Tampon tax fund
George Osborne may well have been the first chancellor to say the word ‘tampon’ in the House of Commons, but the tampon tax fund didn’t get the warm welcome he may have been expecting. The idea was that the VAT we pay on tampons and other sanitary items (around £15 million a year) would be diverted to a fund and given to women’s charities and those tackling domestic violence.
The tampon tax fund is now in its second year and the government will publish a list of charities that will benefit from £12 million of the £15 million at the end of March.
7. Centenary fund
There’s also £5 million for a fund to celebrate the 100th anniversary of women getting the right to vote in 1918. In fact, only women over 30 who owned or rented their own home or who were married to someone who did, won the right to vote in 1918. Women aged 21 or over (the age limit for men to vote at the time) didn’t get the right to vote for another ten years. Maybe there will be another £5 million for a celebration in 2028?