Budget today

This:

Impact on households: distributional analysis to accompany Budget 2026

assets.publishing.service.gov.uk/media/6ae1850f16428df53760627d/Impact_on_households.pdf

MaizieD, that is a very interesting way of looking at income. I haven't seen it before, but it is certainly thought provoking.
Thank you for introducing it to me.

Thanks Cossy when I rented the landlord paid the council tax, hence my confusion,

I think what it’s done is bought time. There’s nothing very controversial or challenging in it for the average taxpayer, so the government will be left to do the other stuff on the agenda without a furore. Whether that was the right thing to do I don’t know, but I understand why they did it.

Chatgtp estimates that weekly 'savings' from the Budget measures could be between £1.35 and £3.45, depending on eligibility criteria. I don't think those with a DI of minus £73 per week are gong to be terribly thrilled. It's not exactly a Lottery win, is it?

I dearly would have loved to see some things frozen, unfrozen and increased to reach sensible levels based on today’s economy and cost of living,

Doodledog

Yes, that's always a tricky balance. I think rent and childcare need to be sorted out first, so people aren't spending such a high percentage of their income on those.

The Chancellor has kept the Local Housing Allowance freeze for Housing Benefit, which will mean the gap between rents and Housing Benefit will continue to increase.

He's also chosen not to tackle the issue of higher earners receiving in effect a higher tax "gift" on pension contributions, which could have raised billions.

I think it's an underwhelming and disappointing budget.

A budget that hasn’t got any unpleasant shocks and helps with the rise in energy prices. Overall so far so good.
As for helping out with energy bills for households between council tax bands A - D, any means of calculating this would cause some to complain but I think is a broad stroke that aims to help those in less expensive houses, assuming that those who live in higher bands are on higher incomes in order to afford mortgage repayments and higher bills on such properties.

Tax Thresholds frozen sìnce 2021 and STILL frozen.

Is this a clumsy joke?

Sorry, forgot the link to the Tracker. It makes interesting reading

asdagroceries.scene7.com/is/content/asdagroceries/Z%20FUTURE/Microsites/Corporate/Asda_Income_Tracker_October_2026.pdf

Asda has been running an Income Tracker since the autumn of 2008. The research for it is carried out by the Centre for Economics and Business Research. The tracker is published every month and the one for October (presumably using September's figures) is now out on line (Thanks to Richard Murphy for drawing attention to it)

One of the thinks the Tracker does is divide households by income in quintiles (20% intervals) and estimate how much spare money the households will have each month after all their essentials are paid for, it's called 'discretionary income.

Discretionary Income is what is left after taxation, groceries, electricity, gas, transport costs and mortgage interest payments or rent. Obviously Asda is very interested in this because it sells a wide range of goods as well as groceries and it wants to know how big the potential market for these might be.

So, in the latest release the bottom quintile has a monthly 'discretionary Income (DI) of minus £76. The next quintile has DI of £11, the third quintile has DI of £93, the fourth has £295 and the fifth has £940. So 60% of UK households are either unable to cover all essential costs each week or are close, or very close. to it. 60% have just over £5,000 a year, or less to spend on holidays, entertainment, replacing a large item of household equipment, savings...

Has anyone noticed the huge jump between the fourth and fifth quintiles?

The question that needs asking is how much do the budget measures which are supposed to address the cost of living crisis actually mean for the first three quintiles? Clearly they will do little for the 1st quintile, who have a DI deficit of nearly £4,000 a year.

It goes back to the first tranche of help in 2022 in the the wake of the energy crisis, a quick way to get help to people. It’s a method favoured by Martin Lewis who does seem to have a lot of sway with Ministers. I think Healey has been listening to him rather a lot.

Some London council tax bands are a bit of an anomaly for a variety of reasons. Perhaps more realistic to compare out of London bands.

Valuations are based on rentable value so they don’t correlate with income which targeted help should be based on. It's the same argument that haunts the winter fuel payment.

IMO, it would have been better to raise the amount of the Warm Home Discount - which was what had been expected.

OldFrill

Doodledog

Yes, that's always a tricky balance. I think rent and childcare need to be sorted out first, so people aren't spending such a high percentage of their income on those.

Isn't rent covered by The Renters' Rights Act 2025.

Depends what you mean by 'covered', really.

There are limits on the number of rises per year, and a right to challenge unfair hikes, but no controls on the amount charged, which will, in most cases, be the maximum the market will allow.

www.gov.uk/government/publications/guide-to-the-renters-rights-act/guide-to-the-renters-rights-act

I'm very pleased to see the gas standing charges tackled.
It has always seemed an inequable charge.

Broad approval from me, I was expecting tax rises but cutting expenses instead so unless there is something unexpected in the small print fingers crossed it balances out

A agree that using the Council Tax bands as an yardstick for who gets help with energy bills is a blunt instrument and unfair.
It does seem an unusual yardstick to use.

Band D Council Tax in Wandsworth is £1,028 pa
The Mean (Average) Salary is £63,129 pa
The Median Salary in Wandsworth is £45,394

Band D Council Tax in Dorset is £2,765.02 pa
The Mean (Average) Salary is £32,862 pa
The Median Salary is around £29,783 to £35,311 pa
Dorset earnings generally track below the UK national average

Defence spending will rise to 3% of GDP (a measure of everything produced in the economy

3 years away.

Is it me, or does he say a lot of things "by 2030.
When presumably there may well be a General Election.

So nothing much has to be done about anything until then?
And me being cynical, maybe not then, as everything could change.

Fully prepared to be corrected[nicely!] if I have got that all wrong.

Doodledog

Yes, that's always a tricky balance. I think rent and childcare need to be sorted out first, so people aren't spending such a high percentage of their income on those.

Isn't rent covered by The Renters' Rights Act 2025.

Sarnia

Anything on defence? That concerns me far more than a few pennies off gherkins.

Defence spending to rise

Defence spending will rise to 3% of GDP (a measure of everything produced in the economy) by 2030 and to 3.5% of GDP by 2035.

Details of how this will be done were not announced and will instead come at the spending review next year, Mr Healey said

Yes, that's always a tricky balance. I think rent and childcare need to be sorted out first, so people aren't spending such a high percentage of their income on those.

Once I'd got over his gushing tribute to his predecessor, I didn't feel there was anything to provoke any extreme reactions. All fairly normal stuff.

While raising the minimum wage is a good thing, it's a double-edged sword for employers here in the hospitality industry because it will push up payroll costs for local pubs, hotels, and holiday parks. So not all rosy in that area which requires lots of workers to operate.

Full speech here:

www.gov.uk/government/speeches/budget-2026-speech

Yes, defence was mentioned. The speech will be available on iPlayer or ITVx if you missed it.

Anything on defence? That concerns me far more than a few pennies off gherkins.

Healey has effectively reintroduced the old age allowance (that was in force for decades until George Osborne abolished it) albeit aligning it with the rate of the full new state pension.

Martin Lewis:

From April 2027, if your total annual income is not more than full new State Pension (£13,037/yr) you will not pay tax. So this is £94 extra tax free. If your total income is slightly higher then for every £3 you earn above, you lose £1 of this extra allowance. So if you earn £13,186 (£150 above) you would get a 'Pension Tax Allowance' meaning you pay £44ish less tax than otherwise (ie £94 minus £50) So by total income of £13,319 you won't receive any extra allowance. HMRC will automatically apply this allowance you will not need to claim it. I will explain better on my show tomorrow. Rushing this now.

A agree that using the Council Tax bands as an yardstick for who gets help with energy bills is a blunt instrument and unfair. A higher band doesn’t necessarily mean a higher income. The Resolution Foundation has said: … the government has failed to learn the lesson of the last price spike – that poorly targeted energy support is wasteful.

I am pleased to hear about the removal of standing changes on gas. It should save me some money to offset against the extra tax I will pay on interest from April 2027. I’m not complaining about the latter. Tax free allowances on savings are generous so if you exceed those you can afford to pay a bit more tax. Removing the lower cash ISA limit for younger savers is welcome too.