Money Saving Expert founder Martin Lewis has delivered his immediate reaction to Chancellor Rachel Reeves's second Budget, detailing precisely how the announced tax and spending changes will affect the finances of households across the UK.
Energy Bill Relief and Tax Reforms
Lewis expressed particular approval for the reforms targeting energy charges. He explained that the government is shifting some existing levies, which he has long criticised, into general taxation and scrapping the 'eco scheme'.
This will result in a reduction of approximately 3.4p per kWh off the electricity unit rate and 0.3p per kWh off the gas unit rate. According to Lewis, with all else being equal, this should translate to an annual saving of around £150 on a typical household energy bill.
The Budget also included significant social policy changes, with Reeves announcing the end of the two-child benefit cap. Furthermore, new council tax bands will be introduced for properties valued at over £2 million and £5 million.
Changes to Savings and Investments
Delving into the adjustments for savers, Martin Lewis clarified the new rules for Cash ISAs. The annual allowance for these accounts will be cut to £12,000, down from the current £20,000. However, this change will not apply to individuals over the age of 65, who will retain the higher £20,000 limit.
The allowance for shares ISAs will remain unchanged at £20,000. Lewis noted there was a logical policy aim behind this move, stating, "The stated aim was not to raise revenue but to encourage young people to invest rather than save." He acknowledged that while he would have preferred a different approach, a £12,000 annual allowance is still a substantial amount for many people.
OBR Apologises for Budget Leak
The Budget day was preceded by controversy when the Office for Budget Responsibility (OBR) accidentally published its forecast hours before the Chancellor's address to Parliament. Martin Lewis took to social media, calling the error "staggering fat fingers."
Later in the day, OBR Chairman Richard Hughes issued a formal apology. "The document was unintentionally uploaded onto our website too early," he stated, confirming that an investigation has been launched. When questioned about his position, Hughes said he would "abide by the recommendations" of the investigation and serve so long as he has the confidence of the Chancellor and the Treasury Committee.
A spokesperson for Rachel Reeves confirmed that the Chancellor retains confidence in Richard Hughes and does not believe he should resign over the leak, which caused confusion in financial markets.
