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Covid mini-budget: what does it mean for you?

The Government has published a mini-budget designed to boost the economy amid Covid-19. Find out what the new measures could mean for you and your money.

The Chancellor has announced a 'mini-budget' designed to help the UK economy recover from Covid-19, partly by getting people spending and boosting the housing market.

Here are some of the key points from Rishi Sunak's statement and what they could mean for you:

Stamp duty holiday

If one of your main financial goals right now is to move home, the mini-budget included some good news: the stamp duty threshold is being temporarily raised to £500,000 in England and Northern Ireland.

That means if you purchase a home for less than £500,000 before 31 March 2021, you won't pay any stamp duty at all.

If you’re a first-time buyer, you currently wouldn’t pay stamp duty on a property up to £300,000 anyway, but if you are able to buy a property between £300,000 and £500,000 you would also now see some savings.

From 1 April 2021, the threshold will come back down to £125,000, or £300,000 for first-time buyers.

To put the change into perspective, here's what you could expect to save during the stamp duty holiday, based on property values up to £500,000:

How much could I save in stamp duty?

 
Home movers (if it's their only property) will save: First-time buyers will save:
  • £100,000 property - No saving
  • £100,000 property - No saving
  • £200,000 property - £1,500 saving
  • £200,000 property - No saving
  • £300,000 property - £5,000 saving
  • £300,000 property - No saving
  • £400,000 property - £10,000 saving
  • £400,000 property - £5,000 saving
  • £500,000 property - £15,000 saving
  • £500,000 property - £10,000 saving

 

You can find calculators online to work out how much stamp duty you have to pay; they're free to use. Try the Money Advice Service or Gov.uk.

Nearly nine out of ten property transactions are expected to be stamp duty-free while the higher threshold is in place, the Government said.

The Chancellor is hoping to get the housing market back on track after the Covid lockdown, which led to a 50% drop in property transactions in May, compared to a year earlier.

House prices have fallen for the first time in eight years, which might actually be welcome news if you're looking to buy your first home.

For those who already own a home in England, the Government is offering grants of up to £5,000 per household for projects designed to make the property more energy-efficient.

Money off food and drink

If you often rely on takeaway food while you're on duty or at the end of a busy shift, you could also benefit from the announcement that VAT on certain items will be reduced from 20% to 5% from 15 July until 12 January 2021.

The tax cut will apply to hot takeaway food, as well as food and non-alcoholic drinks in restaurants, pubs and cafes.

Also, if you're able to find time for a sit-down meal in August, you'll be able to get 50% discounts for each diner (up to £10 a head) on Mondays, Tuesdays and Wednesdays throughout the month.

This is part of the Government's 'Eat out to help out' scheme, which will apply at participating restaurants, pubs and cafes. You can use the scheme as much as you like to get money off food and non-alcoholic drinks, and there's no need for a voucher.

Some of the biggest restaurant chains will be taking part in the initiative. Those that have already confirmed they'll be offering the discounts include:

  • Burger King
  • Pizza Hut
  • Frankie & Benny's
  • Nando's
  • Wagamama

Keep an eye out for posters, digital promotions on websites and social media updates to find out what other companies will be getting involved.

You can find a full rundown of the latest government measures designed to help the economy recover from Covid-19 here.

To keep up with other news and updates that could affect your finances, keep an eye on the Metfriendly blog and sign up to our newsletter. 

If you want to talk to us about Metfriendly savings plans and how we can help with your finances, click here to book a one-to-one meeting at a time and place that is convenient for you, or call us on 01689 891454.

Topics: Making the Most of your Money

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