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Martin Lewis calls out 'wins and fiction' in Jeremy Hunt's budget

Money Saving Expert founder Martin Lewis has given his analysis of the chancellor's 2024 spring budget.

Martin Lewis had been campaigning for a number of changes he wanted to see in Jeremy Hunt's budget.
Martin Lewis had been campaigning for a number of changes he wanted to see in Jeremy Hunt's budget.

Jeremy Hunt laid out his 2024 spring budget on Wednesday, unveiling what he said would mean a £10bn cut to personal taxes.

One of the key features of the chancellor's package was a 2p cut to National Insurance, which, combined with a previous reduction in autumn, he said would save 27 million employees an average of £900 per year.

It was clearly an election-year budget, with the Tories seeking to boost support among a weary electorate by maintaining a 5p cut and a freeze on fuel duty for another 12 months, and the extension of an alcohol duty freeze until 2025.

Abolishing the controversial non-dom tax loophole used by wealthy people with foreign income was another key highlight, as well as a planned tax on vaping products from October 2026. Other key measures to help working Britons include raising the VAT threshold for small businesses from £85,000 to £90,000 and reform to the child benefits system.

This is one issue close to the heart of Money Saving Expert founder Martin Lewis, who wrote to the chancellor in January, saying it was unfair that child benefits are taken away once a parent's income reaches £60,000, even if they are the household's only earner, adding that inflationary pressures have drawn more people into this predicament.

Lewis hailed the Treasury's plans to fix this problem as a big "win", but he was also keen to point out some flaws in Hunt's statement. Here, Yahoo News takes a look at the personal finance journalist's analysis.

'Reducing burden' for low-income people taking emergency loans

Hunt's decision to increase the payment period of advance loans taken by people on Universal Credit was described by Lewis as a "welcome move".

He said it "lessens the burden on some of the payback of lowest incomes", adding that repayments on these loans, taken by nearly one million households, are interest-free.

Lewis later wrote: "The repayments are auto-taken from UC payments. Many complain it doesn't leave enough to live on, so the ability to spread it longer means more disposable income. And if people want to repay quicker they can. So I am supportive of this move. I suspect many benefits advisors will be too."

Scrapping charge on debt relief order

The chancellor's announcement that he is scrapping the £90 fee for debt relief orders is "good news", says Lewis.

A debt relief order is a system in place to help people with personal debts they cannot pay in an attempt to help them make a fresh start (with some caveats).

Lewis tweeted: "These are a sort of easier form of bankruptcy for those with limited assets. The fact you have to pay for it has been a barrier to people who need help getting help. Very pleased to see the charge gone."

Household Support fund extension welcomed, but it's a temporary fix

Hunt announced a six-month extension to a fund helping the most vulnerable people struggling with the cost of living crisis.

The chancellor confirmed he would extend the Household Support Fund with an extra £500 million. The scheme was due to conclude at the end of this month, but Hunt changed course after listening to campaigners' concerns, extending it for another six months.

Hunt said “now is not the time to stop the targeted help it offers” but reiterated that the fund was set up on a temporary basis. Lewis, however, thinks the scheme "probably will needed extending again".

"This is money for local councils to help the most desperate and the cost of living crisis means sadly there's high demand. Would've been awful to cut it off right now," Lewis added.

Hunt called-out on fuel duty 'fiction'

Lewis was quick to pick up on a comment made by the chancellor about fuel duty that he said didn't quite ring true.

As he announced a continued freeze on fuel duty and maintained 5p cut, Hunt told MPs: "If I did nothing fuel duty would increase by 13% this month."

This could appear to some as meaning a rise in fuel duty would be out of Hunt's hands, which, as the chancellor, it obviously isn't.

"This is a fiction. He's just saying 'I'm keeping fuel duty where it is not raising it'," Lewis said.

Will the new 'British ISA' be worth it?

In a bid to boost UK businesses, Hunt unveiled a new "British ISA" which allows an additional £5,000 investment on top of the current £20,000 allowance, targeted at investing in British assets.

The scheme will come from the state-owned National Savings and Investments (NS&I) bank at a three-year fix. Lewis said the key will be what the interest rate of this ISA is, claiming it will "need to be over 5% to be worth it", other than people with very large savings.

Big win on child benefit

Perhaps the measure in the budget that got Lewis the most excited was a change to the threshold at which child benefit payments are taken away, which many claim has penalised single-income households.

Lewis has good reason to cheer this one on, having raised this issue on TV, and on MoneySavingExpert.com. He says the chancellor "tipped him off" ahead of the budget to say this change was due in large part to Lewis's campaigning.

From April, the threshold at which a household has their benefit reduced will move from £50,000 to £60,000, and the threshold at which that benefit is taken away entirely will move from £60,000 to £80,000.

Hunt acknowledged in the Commons that this was a "quick fix", claiming he would work towards changing the system so it is based on family income, and not individual income, hopefully by April 2026.

A tax cut for 'working people' only

While the National Insurance cut will be welcomed by many workers, Lewis was quick to point out that this does not benefit pensioners.

Over the weekend the Sunday Express warned of a "furious backlash" from pensioners, more and more of whom are being pushed into paying income tax due to a freeze on personal allowances.

Lewis later asked if Hunt would raise the personal allowance, but the chancellor has kept them where they are.

Savers still at risk of LISA penalties

Another issue Lewis had asked for in a letter to Hunt, written at the chancellor's request, was to abolish a fine faced by many savers who take out Lifetime ISAs (or LISAs).

You can only use a LISA on a property worth up to £450,000 – a limit that has remained frozen since the scheme launched in 2017, and since that time, Lewis says house prices have risen by more than 30%.

This has left many first-time buyers priced-out by the market and facing a 25% penalty for withdrawing for any purpose other than buying a qualifying home.

Commenting on Hunt's decision not to address this issue, Lewis wrote: "As I've been campaigning on it, chancellor told me just before the budget he said the reason he's not doing it, 'I wanted to do a big home ownership package but that doesn’t work until property prices are definitely rising and I still have to keep an eye on overall borrowing'. He also told me 'I want to do more than remove the penalty. I want to reform LISAs'."

Lewis added: "I am of course disappointed there are no changes this time, but at least it is not off the table."

Tax-free childcare

In what he described as a "landmark offer", the chancellor promised to guarantee “the rates that will be paid to childcare providers” to deliver the government’s free childcare expansion pledge.

Recalling a conversation he had with Hunt just before the budget, Lewis said this ties in with the chancellor's reform of the child benefit system.

"He said the consultation on changing to a family not personal income model will also apply to the £100,000 cut off for tax-free childcare," Lewis wrote.

Premium economy flights to face higher duty

The Treasury announced it will increase the level of air passenger duty (APD) for flights from UK airports by the forecast Retail Prices Index measure of inflation.

Hunt said there would be a higher duty for non-economy flights, which Lewis said does include premium economy.

Unlike leisure travel, flights for business have failed to return to pre-coronavirus levels. The Treasury’s announcement relates to the 2025/26 financial year and is expected to generate £110 million in revenue in the first 12 months.

APD rates for passengers in premium cabins on departures from UK airports currently range from £13 to £200 based on the distance of the flight. The range will rise to between £14 and £202 in the 2024/25 financial year.

Watch: Martin Lewis gives his analysis of Jeremy Hunt's 2024 spring budget