Government sets out 5 changes to help with everyday costs ahead of the budget

The budget is tomorrow, and the government has already announced 5 changes it says will help with the cost of living. They include an end to the carer’s allowance “cliff edge”, paternity pay for self-employed parents and lower prices on some food.

None of these changes has a start date yet, so we’ll know more once the chancellor sets out his plans tomorrow.

What’s changing for unpaid carers?

At the moment, if you get carer’s allowance and earn even a penny over the weekly earnings limit, you lose the whole payment. The limit is roughly what you’d earn working 16 hours a week on the national living wage.

The government says it’ll end this cliff edge. So instead of losing everything, your carer’s allowance will go down by £1 for every £1 you earn over the limit.

That means picking up an extra shift or getting a small pay rise won’t wipe out your whole allowance. And it should mean fewer carers end up owing money back because they went over the limit without realising.

If you’ve been overpaid carer’s allowance and you’re struggling to pay it back, speak to us. We can look at what you owe and help you work out what you can afford.

What’s changing for new parents?

More than 150,000 extra parents a year will be able to get paternity pay, including self-employed dads and partners who’ve missed out until now.

Eligible parents will get 2 weeks of pay, which is currently worth up to £194 a week.

What’s changing for people who drive for work?

If you use your own car for work, your employer can pay you up to 55p a mile tax-free for your first 10,000 business miles each year. The government is making this permanent.

For every business mile over 10,000, the tax-free rate will go up from 25p to 35p a mile. This will help people like nurses, care workers and builders who drive a lot for their jobs.

If your employer pays you less than these rates, you may be able to claim tax relief on the difference from HMRC.

Will my food shop get cheaper?

The government is removing import taxes on more than 100 products, including baked beans, chocolate, garlic and gherkins. It’s also cutting the tax on kerosene, which some homes use for heating oil.

The government says that, together with tax cuts on food it made earlier this year, this could save households up to £21 a year on their food shop.

What else has been announced?

The Post Office is adding hundreds more drop boxes, taking the total to 1,000. This means you’ll be able to send and return parcels without queueing at the counter.

The government has also launched a Warm Homes loans scheme. It gives homeowners low-interest and interest-free loans to fit solar panels, batteries and heat pumps.

Where can I get help with the cost of living?

If you’re finding it hard to keep up with bills, it’s important to check you’re getting all the benefits you’re entitled to. Our benefits calculator can show you what you could get, and our free budget planner can help you see where your money is going.

And if you’re worried about debt, speak to us. Our advice is free, and we’ll help you find a way forward.