The 2018 Budget – how will it affect you?

Chris Torney / 30 October 2018

Find out how the latest Budget could change your finances for better – or worse...

Improvements in the UK’s public finances underpinned Chancellor Philip Hammond’s positive Budget this week. But there was very little news – good or bad – for the country’s beleaguered savers.

Hammond said that Britain was on course to borrow £11.6 billion less than expected in 2018-19, which meant the Government was better placed to fund much needed areas such as the NHS and the new Universal Credit benefit system.

But although growth forecasts for the years ahead were raised slightly, they remain relatively lacklustre. Hammond also warned that, while the UK was hopeful of a successful deal with the European Union over Brexit, he could be forced to revise his plans and deliver an unscheduled emergency Budget next spring if negotiations did not go well.

There was relief in some sectors that rumoured cuts to pension tax relief did not appear in the Budget speech.


The Chancellor confirmed that an spending on the NHS would rise by £20.5 billion (after inflation) over the next five years, and committed extra funds to mental health services.

How to get the most out of your GP appointment

The Government will also give an extra £650 million to local councils next year to help them deal with deficits in the funding of social care – but experts pointed out that much more is needed to tackle this growing problem.

Could you get financially subsidised social care?


If you enjoy a tipple, duty on beer, cider and spirits was frozen in the Budget, although duty on wine will continue to rise in line with inflation.

Motorists may also be pleased to hear that duty on fuel was frozen, and that Hammond is giving local highways authorities £420 million to help them tackle Britain’s pothole epidemic and other road maintenance issues.

What you need to know about claiming for pothole damage

Income tax

The personal income tax allowance is to be raised to £12,500 next April, 12 months sooner than scheduled. This allowance – which currently stands at £11,800 – is the amount an individual can earn before they start to pay income tax. The starting level for higher-rate tax at 40% is also increasing next spring, from the current £46,351 to £50,000.

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There was good news for first-time homebuyers: the current stamp-duty exemption for homes bought on a shared-ownership basis, where the lender takes a share of the equity, is to be extended. But Jeff Bromage, Managing Director for Saga Personal Finance, said that similar changes at the older end of the property market were needed.

"The Chancellor has missed an opportunity to reduce the cost burden for those right-sizing for retirement."

Jeff Bromage, Managing Director, Saga Personal Finance


“While we welcome the changes to stamp duty for first-time buyers, the Chancellor has yet again missed a vital opportunity to increase fluidity in the housing market by reducing the cost burden for those right-sizing ready for retirement,” he explained. “While many people in larger homes would like to downsize, three in five members tell us that the costs of doing so are often so prohibitive that it would eat up much of the benefit they would have hoped to gain.”

Top tips for downsizing your home

Universal Credit

Acknowledging the teething problems that have been associated with the introduction of the new Universal Credit benefits system, Hammond said he would spend an extra £1 billion over the next five years to address transitional issues.

What benefits could you be entitled to?

Claimants will also be able to earn more before having their credit payments halted, following changes to the system announced by the Chancellor.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.