Spring Statement leaving little bounce in consumers step

Dr Mobeus

25 March 2022

With the UK moving on from 2 years of dealing with the Covid pandemic to now helping support the Ukraine in the biggest conflict Europe has seen since the 2nd world war, Rishi was always going to have a hard job with his spring statement.

 

It seems everyone is being impacted on multiple fronts when it comes to the overall cost of living and for once I was paying attention to what he was going to come up with, fingers crossed that there was some light at the end of the tunnel.

 

There were a number of areas where it would be good if he could improve the situation for us all and this is how it played out. The main areas where help was provided were with an increase in the allowance before National is paid to bring it inline with income tax, Fuel duty being cut by 5% and VAT being removed from products that make your home greener, although this excludes double glazing.

 

The main area seemingly not directly being addressed is the spiralling costs of household bills, not only the inflation on pretty much everything you buy from the supermarket but also the energy that you use in your home, whether it be gas or electricity.

 

National Insurance, the tax we pay that contributes to cover benefits and the running of the NHS has had some adjustments, and depending on where in your life you are, could have some level of positive benefits. The threshold now being brought in line with income tax will definitely help the lower earners and unless you earn upward of £35k you will receive some level of benefit, but anyone earning over this level will now be paying more overall.

 

With the cost of fuel at the pumps being headline news currently because of its record highs and with crude oils price per barrel also seemingly increasing every day, the impact of the war is really hitting drivers and travellers of alike, will the UK be able to do new oil deals with other countries that will help the situation? Who knows but for now we will be glad of any help we can to soften the blow of filling up and travelling in so duty being cut by 5 pence per litre will obviously help.

 

We do have to consider though if this is not just stunting the recovery of the country after covid? Maybe more pressure should be put on the petrochemical companies to reduce wholesale prices and potentially an increase in tax on these companies would be a better way for both the country and the consumer to benefit.

 

If there was ever a time to be considering if an electric (EV) was a good idea now seems like it, even with energy prices as they are, filling up your EV is going to be at the worst half the cost of filling up your ICE (Internal Combustion Engine) vehicle and by the time you consider all the free charging points you can currently take advantage of, and with more now being announced by the government along with the special energy tariff the energy companies are offering, it could work out a lot less than that.

 

The final big win worth mentioning (although there was one other main thing Rishi mentions that we will get to in a moment) is the removal of VAT on green energy products that you can install in your home, these include thermal insulation, including  loft and wall insulation, draught strips, not a big things in this day, central heating and hot water systems, solar panels, heat pumps, biomass boilers and wind or water turbines.  Now how big an impact this is actually for you individually is going to be dependent on a couple of factors, 1. do you own your own home, 2. do you have the money to spend on this.

 

Already being suggested as something that only really helps the well-off middle classes you can see why not everyone is jumping up and down about this, if you can afford to put your savings into one of these technologies and getting the long term rewards of reducing or potentially removing your reliance on electricity and gas it’s easy to see the benefits but for a lot of other people does this really help? Renters and the less well-off are going to see very little benefit from this incentive.

 

The yet to be mentioned elephant in the room is the proposed reduction in income tax from 20p to 19p in the pound, but this isn’t scheduled until 2024 which by some coincidence is when the next general election is likely to happen so is being seen as no more than a way of winning favour pre-election, its impact on the very here and now problems that we are all experiencing is negligible so at this point hardly needs any more mention.

 

So, with this all in mind what do we do? Reduce energy usage wherever possible, turn off the lights when not needed and use the most energy efficient products we can lay our hands on, maybe we take the suggestions that an energy company recently put forward and either put on a jumper or cuddle our pets for warmth, Rishi hasn’t really given us anything much better. Yes, fuelling our vehicle is a little cheaper now but still 35p more expensive than it was a month ago. The increase in NI that we are having to bear due to the impact of covid has been slightly offset with an increase in the threshold and we are being encouraged to become more green but that needs an initial from our own pockets to take advantage of.

 

The likelihood is that many people are going to continue to struggle, and things aren’t going to get much better, infact more than likely get worse, so here at freebies we are going to continue to find the best deals and money saving hacks we can to help you while standing for peace in Europe and an end to the war.

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