Kevin Peachey
Cost of living
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The conversation on growth forecasts and self-imposed financial rules may seem very far from you and your life, but the spring declaration could affect both your work and your money.
Here’s what it could mean for you.
1. Services changes
If you are in social benefits, you could be affected directly.
Changes in the scanning of the benefits system, announced for the first time a week ago, will see some people lose support from the end of 2026, although universal credit payments should increase.
This means:
By 2029-30, some 3.2 million families – some current beneficiaries and certain future beneficiaries – will see discounts, with an average loss of £ 1,720 per year once inflation is taken into account in the total of this total, around 800,000 applicants for personal independence payments (PIP) will be affected. This will include 370,000 losers, and others receiving less than they had planned. The average loss is £ 4,500 per year, 3.8 million families will be £ 420 per year better on average due to the increase in universal credit, after taking into account the impact of inflation
Additional changes to social protection reforms also mean less advantages than some may have thought.
For example, the government said there would be an increase in the standard allowance for universal credit for 6.5 million people. This increase will now be £ 1 per week lower than previously billed.
The health element of universal credit (which reflects a capacity limited to work) was going to be divided by two for new applicants at £ 50 per week in 2026-2027, then frozen.
From now on, the ministers have said that, moreover, existing applicants will see their right frozen at £ 97 per week until 2029-30.
2. Standards of life and cleaning bills
No declaration from the major government is isolated. Only a week after this one, a series of household invoices will increase.
We already knew that the increase in water bills, energy prices, council tax and others will hinder on April 1.
There will also be an increase in the minimum wage, which had already been announced.
The wider backdrop is that many people have been pushed to their financial limits by increasing the cost of living.
Inflation – which traces the increase in the cost of living – should be higher this year than forecasts in October.
On average 3.2% this year, according to the Budget Office, before falling to 2.1% in 2026, then 2% compared to 2027. The government’s target is 2%.
As a result, interest rates should be slightly higher than what thought it previously. Interest rates are used by the Bank of England to control inflation.
Overall, however, the standard of living should improve.
This is measured by an disposable income from the real cleaning which is expected to increase by 0.5% per year on average by 2030.
Remember that these are just forecasts. They may be wrong and are likely to change.
3. Jobs and services cut or created
The analysis and forecasts on the general state of the economy will influence the decisions that the Chancellor chooses to take.
For example, official forecasts on economic growth this year have been reduced from 2% to 1%, but are higher in the following years due, in part, to the government’s construction program.
An expenditure examination in June will indicate how each department of government must spend, but the treasure now has a better idea of how much it has to work.
Jobs could be affected and, for example, any reduction in local government financing could have a direct impact on services. Theoretically, this could lead, for example, to the advice that plan to charge for local services.
On the other hand, government’s investment – as with defense projects – could create new jobs.
