Tax and spending decisions by the government may feel distant to your everyday life, but many of the Budget announcements will have a direct impact on you and your money. Here are five ways the Budget will affect you if you are under-25. If you are an 18-to-20 year-old earning the minimum wage, your pay will go up by 3.9% from next April.
Despite the increase, this may be a lower rise than you had expected. That is because Healey reversed course on how his Labour predecessor, Rachel Reeves, had been uprating the minimum wage for young people. Labour had promised to do away with "discriminatory age bands", which would have equalised the minimum wage for everyone over 18.
This year, 18-20 year-olds will see the same increase as older workers, meaning the disparity will remain. So for 18-to-20 year-olds, your pay will rise to £11.27, while over-20s will be paid a minimum of £13.21 an hour. Incredibly, the increase also means a 21-year-old working full time on the minimum wage who took out a student loan after 2023 will earn enough to meet the £25,000 repayment threshold, over which they will start paying back 9% of their earnings, as noted by economist Ben Zaranko.
The Budget contained plans to help people get onto the housing ladder, including the introduction of a "First Time Buyer Isa". This is an account in which savers can build up a deposit, with the government topping up contributions of up to £4,000 each year with a 25% bonus. The new savings account will be introduced in 2029, replacing the existing Lifetime Isa, which has been criticised by some for imposing harsh penalties on those buying homes for more than the £450,000 cap.
The cap will remain, but the new "First Time Buyer Isa" will ensure savers are not penalised by losing their own money when making withdrawals. The penalty for withdrawals from existing Lifetime Isas will be lowered, too, to address concerns about savers being punished. The government had already revealed a £4.7bn scheme for first-time buyers in England dubbed Your First Home.
It is aiming to help 70,000 individuals and couples get on the housing ladder The scheme will allow people to buy a new-build home with a deposit of 2.5%. It will provide them with a loan worth 20% of their property's value to help pay for the purchase. Capped at £110,000 outside London and £140,000 in the capital, it is aimed at those hoping to get on the housing ladder without help from "the bank of mum and dad".
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