The current and recent world events have created significant uncertainty for us all which has led to drastic changes in the UK economy and the current living standards that we are all experiencing. In the release of the spring statement, Chancellor Sunak details several changes that will affect the British public that are aimed to improve the situation.
It’s a shame I can’t take advantage of all these changes but as a Gen-Z and being new to entering the working world, I find I’m in no position to benefit from several aspects of the proposed changes and in fact my decision to go into higher education may be making things harder for me in the future.
Just like me, you’ve probably noticed the rise in energy bills which has happened due to an increase in global demand of oil and gas which isn’t supplied by Russia, paired with the very urgent need to address trying to become globally carbon net zero. To try and offset these increases, the government has announced a 0% VAT rate on the installation of green energy products in homes, such as solar panels, heat pumps and insulation.
Whilst this is nice for those that can afford such improvements and I am completely behind us striving to be green in the way we live, currently, I am a renter (along with the other 13 million brits) and I live in a shared apartment with roommates. I’m in no position to take advantage of this change. Even if I had the money to spend on green home improvements, Its not my property, I’d rather be putting the money towards purchasing my own home and not improving one I don’t own, even if the landlord actually agreed I could modify it.
Fuel has also been affected by the global events with petrol and diesel prices rapidly increasing as inflation hits, and petrol producers seem to be taking the opportunity to gain higher profits after the impacts of Covid over the last couple of years.
The government has promised a temporary cut of 5p on the fuel duty per litre of petrol and diesel for the next 12 months. According to Rishi Sunak, the biggest cut to fuel duty rates ever. This could save around £100 for the average car driver each year but doesn’t do much to reverse the massive hikes in price we have seen recently for all those drivers out there.
Currently, I don’t drive but did have plans on learning this year but considering the still huge cost of petrol even after this reduction and imagining how the current fuel price is going to impact the cost of driving lessons, I may have to rethink this for now.
We’re also yet to see how these savings will affect public transport costs long term, but since the hike in fuel costs over the last month, my bus ticket has gone from £5 to £5.30 each week which doesn’t look very promising.
The main positive change for me, one which I will be able to benefit from is the change in the National Insurance Threshold, the point at which I will start having to pay NI increases from £9,880 to £12,570 from July 2022.
With the potential to be better off by £330 annually, my situation will be slightly better than it could have been, at least until I earn £35,000 or more. That said, with all the price increases lately, I’ll still be spending more than I was three months ago and who knows when this inflation will end.
Tax on the money you earn was always going to be an area where the government would like to be seen as trying to make the system fairer to the richer and poorer a like, but it seems that it is the rich that will be benefitting from 2/3rd of the savings announced.
On top of this, unfortunately for the 2022-23 tax year the basic rate income tax rate will remain at 20% on earnings between £12,570 and £50,270 although from April 2024 this rate will be reduced to 19%. At least that’s something to look forward to I suppose, even if it isn’t the most convenient timing for us taxpayers that could really do with the help now
The final area that I feel is going to negatively affect me with the backdrop of high inflation making everything I buy more expensive is that when I do start moving up the salary ladder, I will have to pay back the student loans I took out to get through the high cost of putting myself through university earlier with the threshold being moved from £27,295 to £25,000, oh well, at least they are extending the time I get to pay it all back from 30 to 40 years if that can be considered something to look forward to.
What have I taken from all of this? I don’t really feel as though I am getting much help from the government with the spiralling cost of living, and it seems that the more well off among us could actually be receiving more of a benefit. I suppose my only option, like millions of others is, if we want to get through this, we’ll have to spend wisely by finding offers, discounts and freebies where we can, become more energy efficient wherever possible whilst budgeting wisely for a healthy financial future.