Spring Statement 2022 – the cost of living mini-budget

As expected, the Spring Statement addressed the cost of living crisis and inflation hitting a 30 year high.

Some of this has stemmed from the countless billions used to protect businesses and individuals from the brutal impact of Covid lockdowns. Equally, we are in the throes of supply-chain issues and additional costs as a result of the war in Ukraine and of course, the hangover from Brexit.

Rising energy, food and fuel bills have all impacted on the public pocket and with that although the speculation was that the Chancellor would scrap the NIC’s increase, he instead increased the threshold by nearly £3,000 and has promised to cut the basic rate of income tax from 20 – 19 pence in the pound in 2024.

Additionally he:

• Cut fuel duty by five pence per litre until March 2023

• Zerro-rated VAT on energy saving materials for home owners

• Increased the employment allowance by £1,000.to £5,000

• Increased the Household Support Fund for vulnerable households. 

Despite these measures, Sunak stated that ‘We should be prepared for the economy and public finances to worsen, potentially significantly.’ So, what remains is that there will be an unavoidable squeeze on our pockets. This means that people may fall into debt which they do not feel able to dig themselves out of. My advice is that those in debt-crisis should always face up to the situation and agree a plan which is acceptable for all parties.

See my video on acting for people in debt here.