Prime Minister’s Spring Statement fails to bring enough relief to struggling households

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Chancellor Rishi Sunak’s spring statement delivered a mixed bag of results with soaring fuel costs and a small dent in the income tax cut planned for 2024. 30-year high of 6.2%.

Inflation is expected to average 7.4% for the rest of 2022, with a peak of 8.4% expected in the final quarter of the year when winter bites a large chunk of household budgets with rising energy costs.

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The Office for Budget Responsibility (OBR) also said the UK economy is predicted to grow at a lower level of 6% compared to 3.8% in 2021, providing bad news for struggling consumer brands and retail companies. It is reported that it does.

fuel and energy

Sunak has announced that fuel tax will increase by 5p per liter until March 2023, but the concession will bring little comfort to households dealing with the soaring cost of filling their cars.

“The Driver’s Giveaway has reduced fuel tax by 5pL, saving UK motorists £7m a day,” says AJ Bell, head of personal finance Laura Starr.

“For an average 55-litre car, this means someone saves £3.30 every time they fill up.”

“But this is just a fraction of the amount we’ve all seen in fuel costs. Since the start of the month, petrol prices have increased by 13p and diesel prices by 21p.”

Mike Owens, Global Sales Trader at Saxo Markets, added: In April. ”

The Chancellor also announced that the addition of energy efficient upgrades to a home will not be subject to VAT for the next five years, although this move will likely mean that households that already have solar panels and new energy efficient announced that it would only benefit the. Infrastructure provides little support to households hanging dangerously into poverty.

standard of living

The Chancellor announced an increase in the National Insurance income threshold from £3,000 to £12,570 a year.

The move will no doubt elicit a sigh of relief from households who stand to keep an extra £330 a year on average.

“As concessions go, increasing the National Insurance threshold to £12,570 in line with personal allowances is a big one,” said Becky O’Connor, head of interactive Investor Savings and Pensions. Ta.

“It will come as a relief to those worried about the impact of health and social care levies. The typical savings of £330 a year is significant.”

Despite this announcement, the Office for Budget Responsibility said the UK faced “the biggest fall in living standards in any financial year since ONS records began in 1956-7”.

Sunak also announced a £500m increase to the Family Support Fund to be given to local authorities from April. The result is a total fund of £1 billion to help vulnerable households meet rising costs of living.

However, these measures are unlikely to provide sufficient relief in the face of rising inflation.

“The big rabbit out of Rishi Sunak’s hat was announcing a cut in income tax rates from 2024, which will grab the headlines but not at all for families struggling with the current cost of living crisis. There’s zero help, said AJ Bell’s Suter.

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