What Do You Want from this Week’s Budget?

Ahead of the Chancellor’s Spring Budget statement this Wednesday, we hit the streets of London to find out the public’s wish list from the Budget

Karen Kwok 6 March, 2017 | 3:39PM
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Philip Hammond’s first – and last – Spring Budget will take place on Wednesday this week. Next year, the Chancellor will rearrange the financial calendar, with a pre-Budget report in March and an Autumn Budget.

But what can we expect from this final Spring Budget Report? Considering the uncertain political environment, with Article 50 to be triggered by the end of this month, it is important for the Government to provide savings and pensions stability, says insurer Aegon.

“We hope the Chancellor will leave the fundamentals of pension tax relief alone but end the Lifetime Allowance, extend auto enrolment concepts to keep pace with the changing nature of today’s workforce and grant early access to the state pension. Against a backdrop of continued low interest rates, the Chancellor must do everything he can to encourage people to prioritise long-term savings,” said Steven Cameron, pensions Director at Aegon.

Tom Selby, senior analyst at AJ Bell echoed Cameron’s views, urging policymakers to resist making knee-jerk changes to pension tax incentives. 

“People are still not saving enough for their retirement and the last thing we need is more uncertainty that would put people off savings. A period of stability in the pension market could go a long way to giving people confidence they can invest without fear of the goalposts moving again,” said Selby.

Selby added that he would like to see the Chancellor maintain the Government’s commitment to increasing the ISA allowance each year in line with inflation. The annual allowance is due to rise significantly to £20,000 in April this year.

The Chancellor will also be considerable pressure to find more funding for the NHS and social care, said Azad Zangana, senior European economist with Schroders.

“There is growing anger about the adjustment to business rates, especially in London and the South-East, where the tax will double in some poorer parts of London, and more than quadruple for some high-end fashion retailers,” said Zangana.

Zangana also anticipates the government will take advantage of low interest rates to invest in badly needed public infrastructure, particularly in projects that help boost long-term productivity. He noted that there was “a small nod in that direction” last year, and public investment spending has increased, but more needs to be done.

With so many issues to address we hit the streets of London to talk to the public and find out just what they expect from Wednesday’s Budget. Our findings show many of them are hoping for more tax cuts for lower income families and local businesses.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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