Chancellor Rachel Reeves has presented Labour’s first Budget in over a decade, delivering a set of policies with a direct impact on personal finances and household budgets across the UK.
With key changes in personal taxes, minimum wage adjustments, and measures aimed at addressing the rising cost of living, this Budget introduces new strategies for managing the current economic landscape. The announcements also include significant allocations for healthcare, housing, and education, reflecting Labour’s focus on supporting families and individuals.
Here’s a quick look at the major updates from the 2024 Budget and what they might mean for you and your finances.
Personal Taxes
- Income Tax & National Insurance: Freeze on tax thresholds set to end in 2028, preventing further bracket creep due to wage growth.
- Capital Gains Tax: Tax on profits from share sales will increase from up to 20% to 24%; property sale rates remain unchanged.
- Inheritance Tax: Threshold freeze extended to 2030.
Business Taxes
- Employer National Insurance: Starting April, NI will apply to employee earnings above £5,000 (down from £9,100), with rates rising from 13.8% to 15%.
- Employment Allowance: Increased from £5,000 to £10,500 to ease NI burdens on companies.
- Private Equity Gains Tax: Tax on profits from deals will rise from up to 28% to 32%.
- Corporation Tax: Main rate on profits over £250,000 remains at 25%.
Transport, Alcohol, and Tobacco
- Public Transport: Bus fare cap in England rises from £2 to £3 in January.
- Fuel Duty: 5p cut on petrol and diesel extended for another year.
- Rail & Infrastructure: Commitments made for HS2 extension to Euston and upgrades to the trans-Pennine line.
- Air & Tobacco Taxes: Private jet tax up by 50%, with tobacco tax increased above inflation rates.
- Alcohol Duty: Tax on non-draught drinks will rise with inflation, but draught drink tax sees a slight cut of 1.7%.
Housing
- Affordable Homes: £500m boost to current budget until 2026.
- Social Housing Rents: Permission for increases above inflation.
- Stamp Duty Surcharge: Second-home purchases in England and Northern Ireland see surcharge rise from 3% to 5%.
Wages, Benefits, and Pensions
- Minimum Wage: Increases to £12.21 for over-21s and £10 for ages 18-20 from April.
- Carer Allowance: Eligibility expanded by raising earnings threshold from £151 to £195 weekly.
Economic Projections
- Growth: UK economy projected to grow 1.1% this year, 2% next, and 1.8% by 2026.
- Inflation: Predicted to average 2.5% this year, decreasing to 2.3% by 2026.
- Debt Definition: Broader asset categories now included in UK debt measures.
Government Spending & Public Services
- NHS: £22.6bn increase in day-to-day funding in England, plus £3.1bn for investment.
- Education: £6.7bn allocated, with £1.4bn for refurbishing over 500 schools.
Additional Allocations
- Infected Blood Scandal: £11.8bn compensation fund for victims.
- Horizon Post Office Scandal: £1.8bn set aside for wrongly prosecuted Post Office sub-postmasters.
- Mineworkers’ Pension Scheme: Government ends surplus cash draw from scheme.
These key points highlight the Budget’s focus on strategic tax adjustments, expanded public service funding, and targeted financial relief measures.
For our detailed insights and reaction to the Budget announcement, book your place at the Herald Budget Briefing Breakfast taking place tomorrow at Virgin Money, 177 Bothwell Street, Glasgow, G2 7ER here.
About the author
