From childcare costs to petrol prices – how today's Budget affects YOUR family's finances

Last modified on Wednesday 15 March 2023

Chancellor Jeremy Hunt delivered his Spring Budget on Wednesday 15 March. Find out how the announcements affect YOUR own household budget

From energy bills and petrol prices to childcare costs and prices in the pubs , the 2023 Spring Budget will have a big impact on families in several areas of life.

Jeremy Hunt unveiled his first-ever Budget as Chancellor on Wednesday 15 March, in the Commons at 12.30pm.

It came on the same day teachers walked out across England and Wales in strike action over pay.

We’ve rounded up how the budget announcements will affect YOU, your family and your household finances.

1. Major childcare costs boost

The government announced huge changes to help working parents pay for childcare which will see all under-5s receive free childcare.

Mr Hunt said: 'We have one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

'For many women, a career break becomes a career end.

'Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands.

'If we matched Dutch levels of participation, there would be more than one million more women who want to work, in the labour force. And we can.

‘I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for 3 and 4 year olds, but for every single child over the age of 9 months.'

Free childcare for children aged 9 months and over

Working parents of children aged 9 months and above will be offered 30 hours FREE childcare a week.

It's the first time babies have been included in any sort of free childcare scheme and is designed to get women back to work.

Working families with children under the age of 2 do not currently receive support after parental leave ends and before free nursery hours are offered for 3 and 4 year olds.

Chancellor Jeremy Hunt has made the move in an effort to help millions of families and help parents get back to work, to boost the economy. For the full details of who is eligible and when this will be rolled out, read our childcare story here.

Child-to-staff ratio

The Government will change minimum staff-to-child ratios from 1:4 to 1:5 for 2 year olds in England but make it 'optional', the Chancellor said, as he announced an increase in funding for nurseries.

This could reduce childcare costs because nurseries will have more income per staff member. This move should see families save £40 per week, or £480 per year, reports The Sun .

You can read more about childcare ratios here.

Up to 50% more help with childcare costs

The Chancellor announced more childcare help for low-income families, offering 50% more help with childcare costs. Mr Hunt increased childcare payments for families on Universal Credit (UC) , in an attempt to help with the cost of living.

One-off £600 payment to childcare workers

To encourage workers into the childcare sector, the government has offered a £600 one-off sign up bonus to childcare workers in Wednesday's budget.

The £600 bonus will be offered – as part of a pilot scheme – to people to encourage them to become childcare workers. This is good news for families struggling to get a place due to nurseries being short staffed.

2. Energy bills help

The Chancellor has delayed a £500 rise to energy bills for three months, which is good news for families.

The Energy Price Guarantee was due to rise from its current level of £2,500-a-year for a typical household to £3,000 in April.

But Mr Hunt has paused the 20% rise until the summer, when wholesale gas costs are expected to fall, bringing down energy prices.

Pre-payment meters

Energy costs for millions of households on pre-payment meters will REDUCE from July.

Currently these customers pay more on average than those on direct debits because of firms managing the meters and passing on the cost.

But from July, prepay customers will no longer pay more than direct debit households, in a move the Treasury says will save households £45 a year.

It estimates the change will cost the taxpayer £200million.

3. Alcohol will cost more

Drinkers face huge tax hikes after the Chancellor confirmed that the price of wine and spirits will rise from August.

Jeremy Hunt has increased alcohol duty rates in line with inflation.

However, a 'Brexit pubs guarantee' will see the duty on draught products in pubs up to 11p lower than the duty in supermarkets from August, the Chancellor said.

He said: 'From August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee. British ale may be warm, but the duty on a pint is frozen.'

Bad news for smokers

Smokers will see the cost of a pack of cigarettes hit £11.80 as the Chancellor announces a huge tobacco tax hike.

The price of a pack of 20 will go up tonight by £1.15 under the latest increase, the biggest ever hike.

4. Fuel won't rise in price

Fuel duty has been frozen for the 13th consecutive year and the 5p cut will be extended for another 12 months, Mr Hunt announced. It spares drivers a total 12p rise per litre.

In last year’s Spring Statement, the government introduced a 5p fuel duty cut to last 12 months.

Motoring group the RAC says the announcement from the Chancellor will save drivers £3.30 at the pump over the next 12 months.

Fuel duty is a tax on petrol, diesel, biodiesel and bioethanol and is included in the price you pay for every litre of fuel you buy.

Currently, fuel duty on both petrol and diesel is 52.95p-a-litre and this rate has been frozen since 2011.

5. Swimming pool improvements

England’s struggling swimming pools have been offered a £63m fund to ease cost pressures.

The new money will be made available for 1 year and managed by Sport England.

It will allow local authorities to apply for funding for leisure centres with pools that face immediate cost pressures including operational and maintenance expenses and energy bills.

The announcement sparked derision from Labour MPs angry that this is a priority for the Budget.

6. Universal Credit crackdown

More than 100,000 Universal Credit claimants will have to increase their search for work or face having their benefits cut, the Chancellor confirmed.

The minimum hours they must work before having to meet DWP job coaches is rising from 15 to 18 hours.

In the final quarter of last year, 8.89 million people aged 16-64 in the UK were 'economically inactive', according to the Office for National Statistics (ONS), with 28% saying long-term illness was why they were out of work.

Numbers have shot to record levels since the pandemic, and ministers believe reducing this is critical to lowering inflation, addressing the skills shortage and boosting growth.

7. Removing barriers to work

The government is drawing up plans to offer those over 50 a 'midlife MoT' that will allow them to assess their financial health to woo them back to work.

8. Pension reforms

Mr Hunt has said he will abolish lifetime allowance for tax-free pensions savings, and raise annual allowance to £60,000 from £40,000.

He says instead of just lifting the lifetime allowance (currently just over £1m) which had been previously reported, he will abolish it.

This is to help encourage highly paid older professionals such as consultant doctors to keep working so they are not hit with higher tax on their pensions.

Mr Hunt said: 'The NHS is our biggest employer, I don't want any doctor to retire early because of the way pension tax works.

'No-one should be pushed out the workforce due to tax reasons.'

9. Work Capability Assessment scrapped

Disabled people will be enticed into work with a promise they will not lose their benefits.

The Work Capability Assessment will be scrapped so they do not have to jump through hoops to get health benefits.

10 Inflation to fall to 2.9%

Fresh forecasts say inflation will fall to 2.9 per cent at the end of 2023, Jeremy Hunt announces.

It is a dramatic fall from the 10.7 per cent that was recorded late last year.

Jeremy Hunt reveals that better-than-expected forecasts mean Britain will now AVOID recession.

He said: 'Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year.'

Does the Budget affect all parts of the UK?

Some parts of the Budget, such as defence spending, affect the whole of the UK.

Others, such as education, only affect England. This is because Scotland, Wales and Northern Ireland make their own decisions in certain policy areas.

Read more about money

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How to cope with the cost of living anxiety