Summary of the Budget 2021: A round-up of the key takeaways

Rishi Sunak revealed the 2021 budget at the end of October with some predictable and not-so predictable inclusions. If you’ve been wondering how the 2021 Budget will affect your personal finances and the UK economy, we have a round-up of the key decisions here.

We’ve focused on five areas that affect us most, namely tax, pay, housing, health and education.

Tax changes

• Fuel duty has been frozen in response to the fuel crisis caused by a shortage of drivers.
• A rumoured increase to the tax on alcohol has been cancelled. Moreover, a new draught relief has been introduced that will reduce the cost of a pint of draught beer or cider by 3p per pint.
• Retail, hospitality and leisure businesses can continue to claim 50% relief on business rates up to £100,000.
• Domestic air passenger duty has been decreased, while long-haul flights over 5,500 miles will be subject to an increase in duty.

Pay changes

• The National Living Wage (NLW) has increased by 6.6% from £8.91 to £9.50. This means a full-time worker should be £1,000 better off before tax each year.
• There has been a pay increase for some public sector professionals after their pay was frozen during the pandemic.

Housing

• A planned 160,000 homes will be built on brownfield land, costing around £2 billion. This is part of a strategy to avoid building on green fields.
• £300 million from the £2 billion will be used by local authorities on smaller brownfield areas.
• A new levy will be introduced to property developers as part of a strategy to generate money to remove unsafe cladding around the UK.

Health

• The National Health Service (NHS) will be a recipient of £5.9 billion in additional funding, increasing the NHS budget x4 by the end of the parliament. This is being funded by a health and social care levy payable by employers, employees and the self-employed.
• 100 new diagnostic centres will be created within established buildings to help detect cancers earlier. These centres will be funded by a £2.3 billion funding injection.
• Over the course of the next three years, the government has pledged £4.2 billion to build 40 new NHS hospitals and to upgrade a further 70 hospitals.

Education

• A £4.7 billion injection will be used to help per-student funding return to the levels last seen in 2010.
• £1.8 billion is being used to help children catch up on lost learning during the pandemic, which includes funding to extend the school day for some children.
• Much of this nicknamed “catch-up cash” will be used to help disadvantaged children below the age of 16.
• £153 million has been earmarked for early years initiatives to help younger children overcome the educational obstacles placed in their way due to the pandemic.

November 2021