Here’s all You Need to Know About UK’s Latest Budget
On Wednesday, October 27, 2021, when Rishi Sunak announced the annual budget for the United Kingdom, the citizens couldn’t stop themselves from asking how the proposed policies would change their lives. Many people had questions like, “will the budget increase mortgage rates?” “will it benefit the self-employed and pensioners?” and most importantly, “will it impact the savings?”
If these were some questions that boggled your mind too, you’re in the right place, ‘cuz today we’re discussing Sunak’s budget and its consequences.
Without wasting any time, let’s get started, shall we?
Q1. Will the mortgage rates rise due to the new budget?
The lower mortgage rates that have been in the news for quite some time have encouraged many people to buy homes during the pandemic. But in the future, chances are the prices will rise.
As per predictions, the cost of living in the UK is supposed to rise by 4% next year. If that happens, naturally, there would be a hike in the interest rates, and the mortgage rates will go up too. But so that you know, the increase in interest rates is not in the hands of the chancellor. Instead, it’s managed by the Bank of England.
Right now, the Office for Budget Responsibility says that if inflation rises beyond 5%, then the bank interest rates and mortgage rates will definitely go up in 2023.
Q2. Will the new budget impact savings?
Though Sunak didn’t speak about changes in investments, savings, or taxes, the prediction of rising inflation clearly states that there could be an increase in savings in the future. If you look at it from our perspective, you’ll understand that when inflation rises, the Bank of England will have to take necessary measures to control it. Its most feasible option at that time would be to increase interest rates so that inflation can be curbed. Taking this step would result in a burden on investors and also increase savings.
Q3. Is the new budget fruitful for pensioners?
Unfortunately, it’s not! The latest budget lacks any specific policies for the pensioners.
As per our info, the state pension is expected to go up by 3.1% in April 2022. Had it not been for the government’s decision to end its triple-lock promise momentarily, the number would have been much higher now. But with prices forecasted to rise as high as 4% in the coming year, it’s a real setback for the pensioners’ income. Plus, looking at the current situation and the chancellor’s words, it’s doubtful he will even support low-income pensioners with their energy bills.
Q4. Will the budget help self-employed people?
The government had previously announced that it would raise the rate of national insurance for both employed and self-employed earning above £9,568. This news caused panic among people, and they thought it would increase tax rates. However, nothing of that sort happened, and the chancellor didn’t take a lot of time to address the concerns of self-employed people during his speech.
Summing it up
Now that you know the probable outcomes of the latest budget, we hope you’ll think twice before taking any step. Try to be smart and save as much as you can so that you don’t face any financial problems in the future.
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