When Chancellor Phillip Hammond held his red briefcase aloft on Wednesday little did we know that the biggest shock would be for the self-employed, who will see their national insurance contributions increase to 10% in April next year and then up to 11% by 2019.
He also reduced the tax-free allowance for dividends from £5,000 to £2,000 from April 2018, affecting company owners and people with investment portfolios outside of pensions and ISAs.
When it comes to wages, the Chancellor also increased the personal tax-free allowance to £11,500 and the higher tax rate threshold to £45,0000, from April 6th, 2017.
These increases were announced before by the Government and it remains committed to increasing personal allowance to £12,500 and a higher rate of tax threshold to £50,000 by the end of the current parliament.
But it wasn’t all bad news for business; corporation tax will reduce to 19% from April this year, with another drop to 17% planned for 2020. Business rates were also tackled as he announced a £300million discretionary fund for local authorities to help hard-hit companies and that no business losing small business rate relief will see their bill increase next year by more than £50 a month.
90% of pubs will receive a £1,000 discount on their business rates, but only for a year.
In pensions, it was announced that the level of Money Purchase Annual Allowance will reduce from £10,000 to £4,000 from April this year.
Mr Hammond also announced a crackdown on foreign pensions – from April, legislation will be put in place to align the treatment of foreign pensions with the UK’s pension tax rules.
He also made a few changes to ISAs. The ISA subscription allowance is to increase to £20,000 from April 6th, while the junior ISA or Child Trust Fund sees a small allowance increase to £4,128.
LISAs (the Lifetime ISA) becomes available, again from April 6th this year, with subscriptions of up to £4,000 bagging a 25% government bonus.
Following the budget, think tank ‘The Resolution Foundation’ said it believed that the squeeze on family and public finances will continue well into the 2020s and the next decade of spending cuts and a lack of pay growth will leave the poorest third of households worse off than they were during the financial crisis of 2008.
The Treasury says it has helped poorer workers by increasing the Living Wage to £7.50 an hour from this April.
In other personal finance news, a leading estate agent has said that its revenue from property sales dropped by nearly a quarter last year following the Brexit vote and changes to stamp duty.
London-based agency Foxtons also said that it believed that 2017 would remain challenging for the property market and that it believed that sales will continue to fall.
Lloyds Bank has set aside a further £350million to pay for mis-sold PPI claims.
The banking regulator, the Financial Conduct Authority (FCA) set a deadline of August 2019 for consumers to make new PPI claims, and this additional £350million is in addition to the £17billion Lloyds has already set aside to settle PPI claims.