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Spring Statement 2022: Cost of living to increase as inflation soars

Chancellor of the Exchequer Rishi Sunak announced the Spring Statement of 2022 in the House of Commons on Wednesday (23rd March).

The announcement came at a time of high economic pressure, due to the ongoing consequences of the pandemic and the war in Ukraine.

As a result, the Spring Statement included adjustments to the current Autumn 2021 Budget and plans to tackle the rising cost of living that is affecting many Officers and their families.

It features key cost of living factors that will impact Police Officers and Staff. The most pertinent point mentioned is related to inflation, which is expected to average 7.4% this year, compared to 4.8% in 2021.

Recommended Police pay rise offset by high inflation

In the Spring Statement, the chancellor announced the Office for Budget Responsibility (OBR) forecast that inflation could reach a 40-year high of 8.7% in the fourth quarter of 2022. High inflation rates will not only impact the lives of Police Officers and Staff, but the entire country.

The Government is set to increase pay in the public sector in 2022. In the Home Office evidence to the Police Remuneration Review Body, 2022 to 2023 policy paper, the current assessment states that a pay uplift of at least 2% for Police Officers will occur in the 2022/23 financial year.

However, the two per cent pay rise suggested by the Police Remuneration Review Body doesn't reflect the rising cost of living, nor does it account for the heavy workloads and extra demands the Police have faced during the past two years of the pandemic.

Given the current conditions across the economy and in most people's individual finances, there's a lot to gain from understanding your own situation and knowing what options are available to help you out.

Metfriendly hosts regular educational seminars where Police Officers and Staff can learn more about key topics from regular saving to retirement planning. You can find out more and book a place here.

Other measures in the Spring Statement

The Spring Statement also set out changes to the National Insurance (NI) threshold.

This means the point at which people start paying NI will rise from £9,500 at present to £12,570 from July. The threshold adjustment will benefit those earning up to approximately £34,000. However, when paying NI, you’ll pay an increased rate of 13.25 per cent (compared with 12 per cent last year).

This change will benefit entry-level Constables and those on lower pay points who will pay less NI this year.

Some other important points raised by the chancellor during his statement included:

  • Fuel duty will be cut by 5p per litre for 12 months, for just the second time in 20 years
  • The five per cent VAT rate will be cut to zero for households installing energy-saving items such as solar panels, heat pumps or insulation.
  • The Government’s household support fund will be doubled to reach £1 billion.

Your plans

To understand how these changes will affect you and your family, it’s important to consider the overall impact of inflation and the cost of living. As the price of things like electricity, gas and fuel increases, make sure you know where your money's going and what you could be doing to make the most of your income and savings.

If the Spring Statement has increased your financial anxieties and concerns, you can book a one-to-one call with Metfriendly to discuss your financial situation and options as you move forward with your Police career.

 

Topics: Making the Most of your Money, News, Police Pay

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