What the Spring Budget 2024 means for your (single) pocket – National Insurance cut,  Child Benefit boost, housing, living and childcare costs

The National Insurance Cut and its Effect on Earnings

Several days before the official budget announcement, rumours were already circulating about a potential cut to National Insurance contribution rates.

During the budget announcement itself, the Chancellor confirmed that employee NI would be reduced from 10% to 8%, while self-employed national insurance would fall from 8% to 6%. This comes on top of a 2p (per pound) cut announced during the Autumn statement in November 2023.

It’s estimated that this cut to national insurance would be worth around £450 per year for someone earning the average full-time salary of £35,000. However, those single people with lower wages probably won’t see a great deal of benefit.

For instance, a single person working in admin role on £22,000 per year will keep only around £188 more of their salary by the end of the year. That extra cash can seem pretty negligible when you consider the high level of single tax (the significantly higher cost of living for a single person, compared to a person who lives with a partner). already paid by people living alone.

Additionally, people on the lowest incomes will continue to miss out, because of the freezes on the thresholds when people actually start paying income tax and national insurance.

That being said, more cuts could be on the way following the next election, as the Chancellor has said the double taxation of pay (income tax and national insurance) is unfair.

Child Benefits for Single Parents and Household Support

Single parents did receive some good news during the 2024 Budget, as Hunt announced that from April, the level of income at which parents start to lose child benefits will increase from £50,000 to £60,000. This means single parents can potentially earn a great deal more, without losing their benefits in the years ahead.

Additionally, the Household Support Fund which is available for single people and couples alike, has been extended for another 6 months. While this doesn’t give homeowners much long-term peace of mind, it does ensure we can access extra support for at least a little longer.

Another interesting announcement was the introduction of longer repayment periods for people on benefits taking out emergency budgeting loans. If you’re a single person on Universal Credit, you can access an interest-free loan for up to £348, and you won’t have to pay anything back for 24 months.

Advances can also be increased to up to £812 if you have children, regardless of whether you’re part of a couple, or you’re a single parent.

Debt Relief Order fees have also been scrapped, meaning if you need to apply for a DRO, you won’t have to pay the £90 fee from the 6th of April. However, you’ll still need to contact an approved debt advisor (like Citizens Advice) to apply.

Housing, Living and Childcare Costs

Housing and living costs are often among the most significant concerns for single people and those living alone. Unfortunately, there haven’t been many changes to housing expenses in this year’s budget. People selling second homes will be able to pay less Capital Gains Tax on the profits of a sale (reduced from 28% to 24%), but that is likely to affect many single people. However normal housing costs for single people seem as though they’ll remain high, – so no let up there.

On the plus side, Hunt did say funding for free childcare hours for parents of children aged 9 months or over will continue to be delivered to nurseries for the next 2 years. This is a good thing if you’re a single parent in search of extra support.

Of course, food prices are still 25% higher than they were 2 years ago, and rents have increased by around 10%, so the cost of living crisis doesn’t appear to be going anywhere. The government will be investing further in nuclear and green energy, which could have an impact on energy prices in the years ahead, but we’ll have to wait and see how impactful this strategy is.

One major bonus for drivers in this year’s Budget, was the decision to freeze fuel duty at its current level for another year. Plus, the 5p cut to fuel duty, introduced in 2022 has also been extended.

For those lucky enough to have an opportunity to save some extra cash, the Chancellor also announced a new British Isa, giving investors an extra £5,000 in tax-free allowance. Plus, a new British Savings Bond will be introduced in April, with a guaranteed fixed rate for 3 years.

The non-domicile taxing process will also be eliminated and updated with a new system. This system previously required people who live in the UK and maintain a home overseas to pay tax on foreign income for four years. Instead, of non-doms continue to reside in the UK, they’ll pay the same tax as anyone else in the UK.

Thoughts from the Most Recent Budget

Ultimately, the 2024 Budget had both it’s good and bad points, much like many previous Budget announcements. Despite rumours before the announcements, positive concepts like the decision to scrap inheritance tax, reduce income tax, and eliminate stamp duty didn’t appear in this Budget.

Additionally, as in many years before, single people, and the issue of single tax has continued to be overlooked by the government. With a little luck, in future years, our government will respond to the backlash of its citizens, and do something to support those of us without a second income.

For the time being, we can only wait for the next Budget announcement.