Budget 2017 – Family Focus
Today is budget day – but what does that mean for you and me?
We’ve cut through the waffle to outline the elements of the budgets that are of key importance to families…
Salaries:
The amount you can earn before paying income tax – the personal allowance – is currently set at £11,000 and will increase to £11,500. In other words, you will be able to earn an additional £500 a year before paying tax on your earnings.
National Living Wage
The National Living Wage will rise from £7.20 to £7.50 in April, for those aged 25 and over. A small increase, but a step in the right direction.
Childcare:
This is a biggy – working parents with three-and-four-year-olds will see their free childcare entitlement doubled from 15 hour to 30 hours a week from September – which could be worth as much as £5,000 a child. To qualify, parents will need to be working at least 16 hours per week, and earn at least £115 per week. The free hours kick in the September after their 3rd birthday.
Please note that private nurseries retain ultimate discretion and may continue to charge for extras including but not limited to food. The free hours also apply to the 38 week year (to mirror school terms) and not the full 52 weeks, therefore it will not be entirely ‘free’.
This is a massive benefit, and in my opinion a fab step in the right direction towards helping families with the cost of childcare. It may also enable some mothers who couldn’t otherwise afford to return to work to return to part or full time employment.
Child Benefit
Child benefit levels remain unchanged and have been frozen in 2017-18 at the existing rate of £20.70 a week for the first child, then £13.70 for other children. With inflation rises expected, this is effectively a cut in terms of the value of this benefit.
Child Tax Credit
From April 2017 will be limited to two children. Any family which has a third or subsequent child born after April will not qualify for Child Tax Credit.
Helping Teenagers Save for First Home:
The budget today talked about the launch of a new Lifetime Individual Savings Account (LISA) for those aged between 18 and 40. Individuals can save up to £4,000 a year, and the government will provide a 25% bonus if the money is used to buy a home.
Education
The Budget has specified an upgrade fund of £216m for existing schools as well as funding for 110 new free schools and grammar schools.
Obesity
Sugary soft drinks are to be taxed at 24p per litre as part of plans to reduce childhood obesity. Proceeds of this tax will be used to help fund sports in primary schools. Personally whilst I do think something needs to be done, I don’t think sugary drinks are alone in being the issue here – I’ll be interested to know how this is implemented – as some of the more ‘healthy’ drink options are as sugary as a can of Coke!
Women
The budget has outlined funding of £5m to support people returning to work after a career break, which may include maternity. What form this will take is yet to be established, but in my opinion customer service and or IT skills for women returning from maternity leave would be a positive step towards helping the secure employment after raising a family.
And most importantly? Wine is increasing in price. By 4p!!! 🙂
Hope this helps!
Lucy x
Thank you! This helps me make sense of it all! It’s great news about childcare although like you say it’s down to the nurseries as well- our childcare cost is actually increasing as they’ve changed their system! So frustrating!
Thanks for doing a post that outlines the important bits in an easy to read format! Very interested to see the new savings fund, we have the Help to Buy ISA and it’s really helped us out. Love the new childcare initiative, this is going to be a massive help to us next year when we can take it up!
Good round up but I would add the National Insurance contributions increase for self-employed people too – will affect many families.
Thanks for this saves me reading it all and working out what’s what
Thank you for simplifying this for me it great to have such a no nonsense approach to read.
ps I’m not a wine drinker , I hope they’ve left gin alone!
What the hell?! Wine is increasing in price?! *cries into large glass of wine* Thanks for this, I never really bother reading into the budget as it confuses me but this is really good to know (although still annoyed as won’t benefit from nursery funding for a good few years so can’t afford to go back to work when Benjamin is a year as planned) x
Hubby relayed the budget to me yesterday and told me it didnt affect us at all, only in money on booze. However you’ve defunked his statement! The free childcare is a massive bonus! we still have 2.5 years til it will be our turn – but this is amazing! Completely takes a weight off my mind! I suppose i could also fork out an extra 4p :p
Some great pointers especally about the childcare, my daughter is 3 in a few months, so roll on September x