Money Wellness
A close up of the Chancellor's red budget briefcase
category iconmanaging your money
calendar icon15 Mar 2023

What the spring budget means for you

We’ve summarised the key announcements from Jeremy Hunt’s first budget that are most likely to affect you.

Energy bills

The government has announced it will be reversing plans to make support for energy bills less generous.

The annual bill for a typical household was due to rise from £2,500 to £3,000 in April under the Energy Price Guarantee. It will now be held at £2,500 until July. At this point, the price of energy should have dropped below that level anyway.

However, the £400 discount to help with winter energy bills is still coming to an end, with no plans to offer it again next winter.

There's also good news for the 4 million energy customers on prepayment meters, with plans announced to bring the prices they pay into line with those of customers paying by Direct Debit.

Tougher requirements for those on universal credit to look for work

If you're on universal credit, you'll need to be earning the equivalent of at least 18 hours a week at the national minimum wage or you'll have to go to work search interviews at a job centre. Currently, where there are two adults in a household, the second adult doesn't have to be looking for work if their partner is working. This exemption is to be removed.

Childcare help

Help with childcare for working parents was announced but this isn’t due to start being introduced for another 12 months. Currently parents with three and four year olds are entitled to up to 30 hours free childcare a week.

From April 2024, parents with two years olds will be entitled to 15 hours of free childcare a week. In September 2024, this will be extended to children over nine months. From September 2025, the number of free hours will increase to 30 for both of these groups.

From this summer, if you’re on universal credit, the maximum amount you’ll be able to claim for childcare is going up from £646 a month to £951 for one child and from £1,108 to £1,630 for two or more children. You’ll also receive the funding up front rather than having to claim it back.

In addition to this, money is being made available to fund before and after-school care for school-age pupils. 

Proposed changes to disability benefits

There are plans to overhaul the disability benefits' system. Under the proposed reforms, being entitled to disability benefits will no longer be linked to a person’s ability to work. Work capability assessments are to be scrapped and people will only be asked to complete one health and disability assessment – the Personal Independent Payment assessment.

Help for drivers

Fuel duty is being frozen again and the 5p cut will stay in place for another year. This will reportedly save the average driver £100 a year.

Higher tax-free allowance for foster carers

At the moment, you don’t pay tax on the first £10,000 you earn from fostering in a tax year. Next year, this will rise to £18,000 for qualifying caregivers.

Cigarettes and alcohol

The price of a 20-pack of cigarettes will go up by £1.55 at 6pm this evening to an average of £14.39.

From August, the price of most alcohol will also increase as duty on the majority of drinks will rise in line with inflation. However, there will be new reliefs for beer, cider and wine sold in pubs.

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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