Money Wellness
Image of the red budget briefcase. 5 things we'd like to see in the budget to help financially vulnerable households
category iconcost of living
calendar icon28 Feb 2024

6 things we’d like to see in the spring budget to help financially vulnerable households

6 things we’d like to see in the spring budget to help financially vulnerable households

With this being the final budget before a general election it is likely to include lots of financial incentives to win over voters.

There’s been lots of chatter about tax cuts and reductions to stamp duty and inheritance tax. But very little has been mentioned about support for the most financially vulnerable.

With Jeremey Hunt announcing that he believes the economy has turned a corner, the final cost of living payment having been distributed, and the household support fund set to end next month, it doesn’t look like much support will be forthcoming.

Despite the chancellor’s optimism, we’re seeing record demand for free debt advice. We’re helping around 1,000 people a day – and it’s not just those on a low income. Millions of households are suffering the effects of record inflation, and high interest and energy rates.

Here’s the six things that we would like to see in the 2024 spring budget that would make a huge different to the lives of millions of people across the country.

1) Raise personal allowance tax threshold

We support those MPs calling for the chancellor to raise the personal allowance tax threshold to reduce the impact of fiscal drag on the country’s lowest earners. Millions of people risk being pulled in to the 20% income tax bracket over the next few years if the threshold isn’t raised. Increasing the allowance in line with inflation would ensure these workers - many of whom are single parents working part time jobs already struggling with cost of living pressures - aren’t pushed further into poverty.

2) Reintroduction of the household support fund

The household support fund ends on 31 March. Millions of households have received money and vouchers for help with food and energy bills. Others have used it to buy essential white goods or cover the cost of school uniform and it has been a lifeline to provide food to children living in poverty during school holidays. The end of the scheme will leave a major hole in support infrastructure that local government – which is seriously lacking in funds –will not be able to fill.

We make thousands of referrals to the household support fund each month. Once it has gone, millions of households will face financial hardship and will go hungry and without warmth.

Given the huge success of the household support fund, we would like to see the government reintroduce it for another two years to provide comfort that there’s somewhere to turn for struggling households.

2) More support for energy debt

Energy debt has risen to record levels with around 2.9 billion owed even over warmer months when bills are less.

Over the past 12 months we’ve seen a significant rise in people contacting us with energy debt – around 75% of those we help every month are in debt to their energy provider. And it’s estimated that around 40% of all UK households have fallen behind with paying their energy bills compared to a year ago.

While the price cap is set to fall over the summer, it will likely remain significantly higher than pre-pandemic levels for the rest of the decade.

We would like to see the government implementing more structured support to help those who need it the most navigate through next winter and beyond. No one should ever have to choose between a warm home and a full stomach.   

3) Ensure childcare support is workable

The much-feted extension of free childcare for hundreds of thousands of working parents doesn’t seem to be playing out as smoothly as promised.

While funding has been made available, the places haven’t followed through because of limited capacity. From the people we support, there seems to be a common theme – there’s too much demand and too little provision.

We’d like to see more support in the spring budget to help this scheme get off the ground and help more parents back into work.

4) Eradicate the two-child limit

In 2015, the government imposed a two-child limit for those claiming means-tested benefits such as universal credit or child tax credit. This prevented households from claiming support for more than two children.

Last April the changes were revealed to have affected 420,000 (55%) of the 772,000 families with three or more children claiming universal credit or child tax credit.

The two-child policy has resulted in thousands of children growing up in poverty - we regularly see evidence of this.

We’d would like to see the government scrap the limit as it disproportionately affects low-income households and minority groups. According to Save the Children, doing so would lift 250,000 children directly out of poverty and improve the financial circumstances of one million children.

5) Re-think the sanctions planned within the ‘Back to work’ plan

We support people every day who have found themselves in debt because of a disability or illness that has stopped them from working.

Removing barriers to work would be welcomed by many who have found that inaccessible public transport or lack of flexible working arrangements make it difficult to find work. Many also could – and want – to return to work but are prevented from doing so because they’re sat on NHS waiting lists awaiting operations or treatment.

Instead of adding conditions and sanctions with the aim of getting more people back into work, we’d like to see the government announce plans to support inclusion and accessibility within workplaces and tackle NHS waiting lists.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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