Out comes the famous red box. A flurry of headlines quickly follows. But when the dust settles on the latest Spring Budget announcement from the chancellor, what does it all really mean for you?
Our in-house experts have analysed the Spring Budget to help you consider if it presents you with opportunities to boost your financial future. Whether your goals are getting your money working harder for the future, or taking the next step on your home ownership journey.
Our conclusion? Well, it would have been nice to have seen the government offer up more support for hardworking people like you. It doesn’t help, of course, that media speculation of more radical changes, in the run-up to the Budget, proved unfounded. They get our hopes up. Only for not a lot to happen.
But don’t despair, as there might still be ways we could help you.
What did the Budget have for first time buyers?
Nowhere was there a bigger difference in Spring Budget hype vs reality than for people wanting to buy a home. Talk of lifting the penalty cap on Lifetime ISAs (LISAs) came to nothing. There were no major changes to stamp duty thresholds (which is already 0% for first time buyers purchasing a home under £425,000 in England or Northern Ireland). A proposal to introduce 99% mortgages is rumoured to have been ditched at the last minute.
"It’s no secret one of the biggest obstacles to home-buying is having a big enough deposit," says Sam Cockshott, Senior Mortgage Product Manager. "Our own research found 4 in 10 renters would consider moving back in with their parents so they can save enough to get on the property ladder. They’re often paying rents that are higher than a mortgage, and struggling to save up for a deposit.
"A 99% scheme would have helped more renters, as instead of needing a deposit of at least 5% of the value of a home they want to buy, they would have only needed 1%."
But as Sam explains, the Society could actually help you if you’re renting and keen to buy a home. "Last year we launched a Track Record Mortgage that offers you the opportunity to buy a home with less than a 5% deposit – or even if you have no deposit at all. As long as you’re 21 or over, can evidence you can afford the mortgage payments and have a track record of 12 months’ rental payments in a row over the last 18 months, you could borrow up to 100% of a property value with our 5 year fixed rate mortgage.
"The great news is that after broadening our criteria, it’s no longer exclusive to first time buyers. If you haven’t owned a home in the last three years and are now renting, you could also benefit."
Learn more about our Track Record Mortgage.
How can I afford a mortgage?
Although the Budget did include plans to build more UK homes, and efforts to encourage people to sell their second homes, Sam had hoped to see ideas to help more people be able to afford mortgages. "We’re very aware from speaking to members and non-members that it’s not easy to afford a mortgage.
"It’s why we offer an Income Booster, which allows you to add up to three people onto a mortgage, without making them a legal owner of the property. All borrowers share the legal responsibility for paying the mortgage. And it means you can factor in all of their incomes when applying for a Skipton mortgage, which could help you."
Learn more about our Income Booster.
Please be aware you could lose your home if you don’t keep up your mortgage repayments
Is the British Savings Bond worth it?
If you’re trying to save your money for the future, you’ll know it hasn’t been easy with the cost of living crisis ramping up our bills. Jeremy Hunt said in the Budget that the rate of inflation is set to fall faster than expected. So is this a good time to prioritise saving?
The Budget included news of a British Savings Bond, which will launch in April 2024 with National Savings and Investments (NS&I). At the time of writing, we don’t yet know what interest rate this Bond will offer savers. And that’s not the only consideration.
Alex Sitaras, Head of Savings and Partnership Products, states, "We'll wait to see the full details of how the British Savings Bond works. But we do know there won’t be an ISA version. So there’s a potential you will pay tax on the interest you receive, if this is above your annual Personal Savings Allowance. This might mean the amount of interest you receive, after tax, could be worth less compared to saving in an ISA.
"You also have to commit your money for at least three years. If you’re interested in the British Savings Bond when it’s released, I would definitely recommend checking other options too. There might be other, more rewarding savings accounts elsewhere."
If you’re not sure the best route for you, our savings experts are here to help you consider our own range of savings options.
Book your FREE My Money Review.
Did the Budget include anything to help me save for retirement?
When it comes to bigger goals like retirement, this wasn’t a Budget with anything to excite. But, just in case you missed it, over the past year the government has announced changes designed to encourage you to save more into your pension.
- For example, the amount you can pay into a pension each year, without paying tax, went up from £40,000 to £60,000 a year ago.
- The Lifetime Allowance – which limits how much you can have overall in your pension before you have to pay a tax charge – is also going. It’s being replaced by two new allowances, the lump sum allowance and the lump sum and death benefit allowance. So there are still limits with pensions.
The way your pension is taxed depends on personal circumstances. Tax rules may change in the future.
New ISA launched aimed at British investment, but what does the new UK ISA mean for you?
For other long-term goals, a new type of ISA was announced in the Budget. It was unveiled as the British ISA (but officially it’s called the UK ISA). The plan is for each of us to have an extra £5,000 annual allowance to invest in UK assets, with no tax to pay on any returns you achieve.
Rebecca Garnett, Financial Advice Technical Support, explains, "At the moment this is very much an idea. The government will consult with industry experts to work out the finer details. However, any opportunities to help people invest even more of their money tax-efficiently is something we welcome."
Skipton Building Society has offered a financial advice service for over 30 years. We’ve helped thousands of customers invest their savings for long-term goals like retirement. Rebecca adds, "The recent changes to pension rules could really support you in planning for a fulfilling retirement – and it’s something our expert advisers are here to talk to you about.
"If you’re willing to accept risk with your money and commit it for at least five years, we can talk to you about planning your financial goals. Our personalised recommendations take into account your unique circumstances, including making use of your tax allowances."
Our financial advice service is available if you can invest or reinvest at least £20,000, or can commit to investing at least £500 per month. If you’d like advice on your current investments/pensions, the minimum value required is £50,000.
Find out if financial advice might be right for you and how to book your FREE initial consultation.
Important Information
A pension is a long-term investment. Your money is at risk with investing. The value of your investment can go down or up and you may get back less than you invested.