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Saturday, September 19, 2020

2020 Budget: Explained exactly what it means for your money and wages

It is the day of the budget – when the new chancellor Rishi Sunak will announce his forecasts for the next 12 months in a post Brexit Britain.

The budget talk is his chance to give the nation an insight into how the economy is doing, where the government will spend the money it collects and what changes it is making to the way we are taxed.

In essence, it’s the government’s way of telling you how it will spend your money – and this year it will fall on March 11th.

In his first delivery as new chancellor, Sunak presented a series of new measures to help Britain cope with the ongoing coronavirus outbreak.

“This is the government that does things,” said Sunak, opening his speech.

Speaking of coronavirus, he said the government will do “everything it can do to support the economy”,

It arrives a few hours after the Bank of England has reduced interest rates to 0.25%, the lowest since 2008.

“A temporary disruption to our economy is likely to occur. A fifth of the population may have to be out of work at any time. For a period, our production capacity will decline. But it will be temporary – and life will return to normal.”

But what does it all mean for your money? Here is our guide to the impact on your bank balance.

Safety for workers during the coronavirus epidemic

Self-employed workers will have easier access to benefits

“We must provide safety and support to those who fall ill and are unable to work. We will give everyone a safety net,” explained Sunak.

Under the new rules, sick pay will be mandatory for all those who are advised to insulate themselves, even if they have not presented any symptoms.

Sick notes will also be available by contacting 111, which means workers will not have to visit their family doctor or hospital.

However, five million self-employed workers and at least 1.5 million low-income Brits who fall below these earnings are still not eligible for sick pay.

For self-employed workers, the government will accelerate benefits to help them during the crisis period.

Those who receive a hiring and support contribution allowance will be able to apply for financial aid from the first day instead of the eighth day.

The government is also easing the obligation for anyone to physically attend the work center during the coronavirus epidemic. If you are not feeling well, you can stay in touch using your online portal instead.

For employers with fewer than 250 employees, the government has said it will reimburse sickness wages for up to 14 days.

“I am also creating a £ 500 million trouble fund for local authorities to support vulnerable people in their local area,” concluded the chancellor.

New minimum wages

New minimum wages since April 2020

* £ 3.90 appraises apples to apprentices under the age of 19 or in their first year

As of April 1, 2020, over two million people will receive a salary increase thanks to the increase in the minimum wage for all workers with a base rate.

Next month, the National Living Wage (NLW) – the rate for over 25 years – will rise from £ 8.21 to £ 8.72 per hour, marking a 6.2% increase.

Apprentices and all other base rate workers over the age of 16 will be affected by the change taking place on April 1st.

Rates, set by the Low Pay Commission, are equivalent to a £ 930 increase over the year for a full-time worker aged 25 or over.

Younger workers who receive the national minimum wage will also see their wages increase with increases of between 4.6% and 6.5%, depending on their age, with 21-24 years of age seeing an increase of 6.5 % from £ 7.70 to £ 8.20 per hour.

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