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Spring Budget 2024 Summary for Parents

Our MPO finance experts are explaining exactly what last week's Spring Budget 2024 announcement means for the finances of millions of parents and families across the UK

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 14 March 2024

8 min read

Spring Budget 2024 Summary for Parents

Last week, UK Chancellor Jeremy Hunt revealed his Spring Budget 2024 plans which will impact thousands of families across the country. Some of the main new policies announced include much needed changes to child benefit, as well as adjustments to tax, other benefits and savings accounts.

Our main concern at MoneyPeopleOnline is if UK families will benefit from these changes – or if they will actually lose money longer term. Many financial experts have referred to this budget as an ‘election budget’, intended to appeal to voters ahead of this year’s general election.

It will be interesting to see if these changes will really benefit consumers long term, or if they are a ‘quick fix’ for the Conservative government after two years of financial difficulty. High inflation and interest rates have led to a significant cost of living crisis in this country, with many families sadly struggling to get by.

In this article, our MPO finance experts are exploring all the main changes announced in the Spring Budget 2024 and how they will affect parents and families in the UK.

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60-Second Summary – Spring Budget 2024 Summary for Parents

The UK Spring Budget 2024 has introduced changes which will affect the finances of millions of families across the UK. Some changes like reforms to child benefits will be beneficial, while certain tax updates may actually cost you money.

Here is a quick breakdown of the main points announced in Jeremy Hunt’s Spring Budget for 2024.

  • Child benefit rules have been updated, with the threshold for repayment raised to £60,000 (from £50,000). Parents earning up to £80,000 will now be able to claim child benefit, though the amount will be tapered for parents earning over £60,000.
  • The government plans for both child benefit and tax-free childcare allowances to be based on family income rather than individual income from 2026.
  • Millions of workers will benefit from a further 2% cut to National Insurance, though parents earning between £12,500 – £26,000 aren’t likely to see massive savings. Parents that will benefit most will be those earning between £26,000 to £60,000 per year.
  • Parents earning over £60,000 per year may be slightly worse off due to National Insurance changes, though how much this affects you will vary.
  • Emergency Universal Credit loans can now be repaid over 24 months instead of 12, easing financial pressure on families with lower incomes.
  • The government still have not addressed current issues with Lifetime ISAs. These ISAs unfairly charge a 6.25% fee to buyers who want to buy a property worth more than the set £450,000 limit.
  • Other announced changes include a new ‘British ISA’ and ‘British Savings Bond’, an extension to the freeze on alcohol and fuel duty and the introduction of a new ‘vaping products duty’ from 2026.

The Spring Budget announcement happened last week on Wednesday 6th March 2024. After the Spring Budget was released, the proposed changes were debated in parliament between the 7th – 12th March 2024.

There are likely to be further discussions about the Spring Budget over the next few months, and our MPO experts will keep you up to date on any further news.

How often is there a UK budget?

The UK government typically announces a new budget and financial plan once per year, though there can be other additional announcements. For example, there was an Autumn Budget announcement in October 2023, which has been followed by the 2024 Spring Budget.

Our very own MPO Money Mum & Dad had a lot of predictions and hopes for the UK Spring Budget announcement. Our Money Mum Caz was particularly concerned with child benefit and urged Jeremy Hunt to make changes to the current system, as seen our recent podcast video.

What is Child Benefit and How Does It Work? | MoneyPeopleOnline

Complicated tax rules often mean that parents can’t claim child benefit, or that parents can be fined if they don’t realise that they need to repay it.

We were extremely pleased to see that the Chancellor did agree to reform child benefit rules. This is something that has needed addressing for a long time, with financial journalists like Martin Lewis passionately campaigning for these changes to happen.

Our Money Dad Dan wanted to see changes made to the current Lifetime ISA rules, which make it overly difficult for home buyers to access their savings. Sadly, this has not been addressed in the Spring Budget, and we urge the Chancellor to look at this issue as soon as possible.

As for the rest of the changes that have been announced, financial experts have mixed opinions on whether these will really benefit UK families, which we will explain in more detail below.

Here our MPO financial experts have written a full breakdown of each of the main changes announced in the Spring Budget 2024.

There has been a lot of campaigning for change in child benefit in recent months, particularly from Martin Lewis and MoneySavingExpert.com. Our team at MoneyPeopleOnline have also been vocal about our views on the current ‘unfair’ rules surrounding child benefit.

We are happy to say that the Chancellor has taken note of these campaigns and has agreed to reform child benefit rules. Ever since it was introduced in 2013, the ‘Child Benefit Higher Income Charge’ has caused issues for millions of UK families and particularly for single parents. Once a parent earns over £50,000 annually, they must repay 1% of their child benefit entitlement for every £100 over £50,000.

The government has agreed to move HMRC to basing child benefit on ‘family income’ instead of individual income as of 2026, following further discussions and consultations. For now, the threshold for repaying child benefits has been raised from £50,000 to £60,000, which will lead to savings for 170,000 UK households.

In even better news for parents, parents earning anywhere up to £80,000 per year can now receive child benefit. This was previously capped at £60,000, so it’s brilliant to see more financial support becoming available for a higher number of UK families. The amount of benefit will be ‘tapered’ for those earning over £60,000, but it does mean that some level of support will be available.

There have also been some updates to the UK’s tax-free childcare system for working parents, which will be welcome news for many UK households. Currently, you can receive up to 20% towards the cost of childcare, but this cuts off if any family member earns over £100,000 per year.

The amount of tax-free childcare that you are entitled to will be based on family income and not individual income as of 2026. The government have also promised to increase the rate paid to childcare providers (e.g. nurseries), to help with their scheme that offers 30 hours of funded childcare.

Anyone who needs an advance on their Universal Credit due to an emergency (e.g. unexpected damage to your home) will no longer need to pay this back over 12 months. This has been extended to 24 months, giving parents with lower incomes longer to repay this emergency loan. This is also an interest free loan, so the amount owed will never increase over time.

A similar change is the extension of the Household Support Fund, which allows struggling families to access emergency funds from their local council. This fund will now be available until September 2024 and will hopefully be extended again following reviews later in the year.

This fund can help with essential bills such as energy or water bills, as well as the cost of food, clothing etc. You can use this Gov.uk tool to find the details for your local council, if you need to apply for this fund: Gov.uk – Find your local council

National Insurance will be cut by 2%, starting from the 6th April 2024. This means that millions of UK workers will be receiving more ‘take home’ pay, as these rules apply to both employed and self-employed workers.

In 2023, UK employees were paying 12% National Insurance each month which was dropped to 10% in January this year. This new announcement means that the National Insurance tax rate will drop to 8% as of April 2024.

However, due to frozen tax thresholds which increase taxable income in the UK (fiscal drag), some workers may not benefit massively from changes to National Insurance. Any parents earning £12,500 – £26,000 per year are unlikely to notice a massive difference in the amount of tax they pay and may be worse off in some cases.

Any parents earning £26,000 – £60,000 will be better off financially based on the National Insurance cut. It is possible that anyone earning over £60,000 per year will be slightly worse off, but this will depend on the exact amount that you earn.

For any self-employed parents, your Class 4 Tax Contributions were planned to drop from 9% to 8% in April 2024. Due to the new cuts, the new rate will now be 6% instead.

Anyone earning over £6,725 will no longer pay the fixed £3.45 weekly National Insurance contribution (Class 2) starting from April, as announced in the Autumn Budget.

Note: Self-employed workers can still make voluntary National Insurance payments, to make sure that they receive State Pension when they retire.

Other key points around tax were:

  • Fuel and alcohol duty have been frozen until next year at least to keep costs low for UK consumers and businesses
  • Taxes on vapes (e-cigarettes) will be higher from October 2026, as a new ‘vaping products duty’ will be introduced – mainly to discourage children and young people from vaping
  • UK holidaymakers need to be aware that air passenger duty will rise in 2025/26, which could potentially lead to higher flight prices for your holidays. Any changes to this will be based on UK inflation at the time.
  • Income tax and National Insurance thresholds will be frozen until 2028, which are the thresholds that decide when you start paying tax on your earnings

Citizen’s Advice has been campaigning to remove the unfair £90 charge for people facing bankruptcy to get a ‘debt relief order’ which can help them. This charge will be being removed according to the Spring Budget, to help thousands of people with significant money troubles.

In savings news, there sadly haven’t been any changes made to the Lifetime ISA just yet, which is something that our MPO experts had been hoping for.

At the moment, there are strict rules around the use of Lifetime ISAs which can make it difficult to access your money. In fact, if you want to buy a house that is more expensive than the ISA limit of £450,000, you will be charged 6.25% to withdraw your own money!

We’re hopeful that the government will reform the way that Lifetime ISAs work in the future, as these charges are simply ridiculous.

In the meantime, the Chancellor has just announced a new ‘British ISA’ which will be introduced later this year. You can currently only deposit £20,000 per year in a cash ISA, but you will be allowed an additional £5,000 if investing in British stocks and shares.

Note: NS&I will be launching a new ‘British Savings Bond’ in April 2024, but the information around interest rates is limited so far. We will bring you more news on this once more information has been released.

Overall, we would say that most parents will either be in the same financial situation or slightly better off following the Spring Budget announcement. However, there definitely needs to be change in the tax thresholds over the next few years, to ensure that families on lower incomes are well supported.

These thresholds decide when UK workers start paying tax on their earnings and the government have frozen Income Tax and National Insurance thresholds until 2028. With inflation causing costs to rise across for essentials like rent, mortgage, food, energy etc, the tax thresholds need to rise to reflect this.

In the short term, the changes to child benefit and tax-free childcare are good news for parents across the UK. If you are a parent that is struggling with money, you also can contact organisations like Citizen’s Advice to find out if any other help is available.

We hope that this quick Budget breakdown was useful, but if you want to read the full Spring Budget for yourself, you can do so here: Gov.uk – Spring Budget 2024

More finance news

Here are links to more of our recent tax and finance news stories which will impact parents and families across the UK.

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