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How does the 2016 Budget affect me?

With the library full of caffeine-buzzed students desperately trying to pull all-nighters in an attempt to reach their word count, it becomes apparent – it’s deadline season. With all the manic work we have, and the sweet light of end of term taunting us, it seems hard to keep up with ‘the news’. But what goes on in politics affects us. The number of young people in Britain today is the same as the Scottish population; if they can have so much of an effect on Government, then why can’t we?

George Osbourne released the 2016 Budget, and whilst a lot of it is irrelevant to us, boring, or very difficult to understand it is definitely something we should read and know how it is affecting us. So, we girls at HCX have done the work for you. Here are the main points of the budget 2016 that will affect us as students:

The new Lifetime ISA

The government are planning to phase out the Help to Buy ISA with a view to getting rid of it completely by 2019. This new ISA seems to be the planned replacement, so here is some quick info…

You can pay a max of £4,000 into it a year

  • The government will then pay you 25% of that (so a max of £1,000/year).
  • You are eligible for the bonus on savings up to the age of 50.
  • You can’t claim the bonus until you buy a home (first time buyer) or you are over 60.
  • The max house value you can use it towards is £450,000 (anywhere in the country).
  • You can combine your bonus with a partner to buy a house.
  • It opens in April 2017.
  • You are allowed to have a Help to Buy ISA open at the same time but you cannot use the bonus from both.
  • You can transfer any Help to Buy funds into it.
  • If you withdraw early (ie. before 60 without putting it towards a house) you lose your 25% bonus, interest & have to pay a 5% fee.

It is better than the Help to Buy because you can use it towards a higher value house and have the opportunity to build up a larger bonus than just £3,000. However, it comes with a sharp sting if you ever need to withdraw the money early.

Sugar tax on drinks

By 2018 there will be a sugar tax introduced on fizzy drinks. Probably a necessary and wise decision, but will hurt our bank balances with the amount of vodka lemonade we drink at pres…

Tax free allowance raised to £11,500

This basically means that until you earn over £11,500 a year you won’t have to pay any tax. Anything you earn over this amount will be taxed at 20% (until you reach the higher tax rate).

Beer and cider duty is frozen

In other words, the price of alcohol will not be going up any time soon. Music to our ears.

Other interesting points

  • Foreign firms selling on Amazon/eBay will have to pay VAT. Meaning buying that dress from china for £4.32 might be a thing of the past.
  • Schools can now finish at 4:30pm instead of 3:30pm (although we still can’t fathom how we used to make it through a whole school day without 3 naps and a litre of coffee).
  • Fuel duty is frozen.
  • All schools to become academies by 2020.

References: 

http://www.ft.com/cms/s/0/26c2b6ea-eb66-11e5-888e-2eadd5fbc4a4.html#axzz…

http://www.telegraph.co.uk/business/2016/03/16/budget-2016-summary-and-h…

 

I'm Lucy Tillott, a 19 year old Liberal Arts student at the University of Exeter, but am originally from Birmingham. I am studying English and Politics and love getting into debates, which is probably why I am the Current Affairs editor of the Exeter chapter of HerCampus. I was a writer for the current affairs section of HerCampus last year, and loved the opportunity to write every week, make friends, and involve myself in the comradery of HerCampus. I hope to be heavily involved with the thriving community of Exeter HerCampus while sparking an interest in current affairs in our readers.
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