The Chancellor Rishi Sunak announced the 2021 Budget last week. It was full of information on how the government plans to support the economy to recover from the coronavirus pandemic. Within these announcements, the Chancellor also set out additional financial support for individuals over the next few months.

In this blog post, we’ll include the main changes and updates affecting Manchester residents. If you have any questions or need advice about your finances following the Budget announcements, please get in touch with us. 

Support for benefits claimants

We’ve been involved with the Citizens Advice #KeepTheLifeline campaign, calling on the government to keep the £20 a week uplift to Universal Credit. Last week, the Chancellor announced that this uplift will be extended for a further 6 months, now set to end in August 2021. This means you’ll continue to receive the additional £20 a week uplift to your Universal Credit payments that began in March 2020.

If you’re in receipt of Working Tax Credit, you’ll receive equivalent support in the form of a £500 one-off payment. This is meant to offer the same 6 months’ financial uplift.

While we hope this will come as a relief to low-income Manchester residents, we continue to call for temporary uplifts to welfare benefits to be made permanent. The pandemic has highlighted financial inequalities within and across Manchester, and we support continued financial help for some of our most vulnerable clients.

Find out more about claiming welfare benefits.

Change to personal tax allowances

The thresholds for personal income tax will increase for the next tax year (from April 2021) and will then be frozen until 2026. Personal income tax allowance will rise from £12,500 to £12,570, with the higher tax rate allowance rising from £50,000 to £50,270.

This means that most people will pay tax on more of their personal income than they would have if the allowances rose gradually over the next few years. 

Find out more about income tax.

Support for self-employed residents

While the furlough scheme for employees was extended for a further 6 months, the self-employed also received a boost in the Budget. The Chancellor announced details of the fourth and fifth payments under the Self-employed Income Support Scheme (SEISS) in last week’s Budget. The fourth payment will cover February to April and will offer self-employed workers up to 80% of their average monthly profits (up to a maximum of £2,500). 

The fifth payment will be the final in the SEISS and will cover May to September. The size of this payment will depend on how much turnover self-employed workers have lost during this period.

Find out more about the SEISS.

Help for property buyers

The Chancellor announced the extension of the temporary stamp duty holiday on the first £500,000 of property purchases. Buyers will pay no stamp duty on purchases up to the threshold until the end of June. This could help first-time buyers in Manchester to get onto the property ladder.

From July to September, the threshold for paying zero stamp duty will reduce to £250,000, and rates will return to normal from October.

Find out more about buying a property.

If you need help or advice following the Budget, you can contact our Adviceline free on 0808 278 7800 or explore our website to find out ways to get advice online.