Money advisor says budget lacks immediate support for struggling households

Dan Bebbington, debt and energy manager at the Wrekin Housing Group, welcomed the uplift in minimum wage but said there were few other measures that would improve people’s lives in the short term.

Mr Bebbington said: “The focus has clearly been on how the government intends to get the economy on stronger footing and invest in public services, with the promise that we will all reap the benefits further down the line.

“That’s all well and good – but we know that people are struggling right now. What we didn’t hear in the Budget were any big pledges on helping to ease this strain in the short term.

“So many people are now unable to achieve even a basic standard of living from the income they receive, whether that’s through wages, pension, benefits or other means.

“Raising the living wage to a level that takes into account the cost of living for the first time was a welcome step that will mean around £1,400 extra a year for a full-time worker. But the new £12.21 rate for those over 21 still falls short of the £12.60 per hour that the Real Living Wage Foundation says is the minimum people need to be able to meet their everyday needs.

“It is also good news that those aged 18 to 20 will be bumped up from £8.60 to £10 an hour – many workers in this age bracket have living costs to meet and deserve to be earning a wage that can support them.

“However, we do need to remember that the continued freeze on income tax thresholds means more low-paid part-time workers will continue to be dragged into paying tax. It was good to hear the chancellor confirm the freeze would end in 2028, but bringing this forward would have given households a vital boost by allowing them to keep more of their pay packet.

“The chancellor has also kept her promise not to raise the rates of income tax, VAT or employee National Insurance, but is raising the rate of National Insurance for employers. There’s a chance this could impact staff wages down the line, if businesses decide to recoup the money by reducing or putting off future planned pay reviews.

“There were a few other measures that will make a substantial difference to the people they effect. One of those is the extension of the Household Support Fund and Discretionary Housing Payment schemes administered by local councils. These initiatives have been a lifeline to local people in crisis situations, and their loss would be a huge cause for concern. I would urge the government to go further and make them permanent.

“There were also some changes announced that will affect people on certain benefits. Those claiming carer’s allowance will also be able to earn more money before losing the benefit, which will be a big help to unpaid carers – who are usually women.

“And for those on Universal Credit who are having deductions to repay debt, the amount that can be taken each month will be cut from 25% to 15% of their standard allowance.

“While these targeted measures will help support some of those households with the lowest incomes, they are quite limited and won’t help the majority of people.”