Martin Lewis – latest: ‘No change is big change’ in Budget, says money saving expert

Finance expert Martin Lewis is hosting a TV special on Jeremy Hunt’s back to work Budget.

The half-hour ITV programme is looking at the highlights of the Chancellor’s announcement on Wednesday, with tips on how to deal with the changes.

It comes after Mr Lewis revealed “the one miss” in the government’s expansion of childcare funding announcement.

The maximum amount that parents on universal credit can claim for childcare will also increase from £646 to £951 for one child, and from £1,108 to £1,630 for two – an increase of just under 50 per cent.

However, in a video posted on Twitter, Mr Lewis warned that it would not cover all benefits.

Mr Hunt’s childcare reforms have been criticised for delays to the rollout.

Shadow chancellor Rachel Reeves said the government is “a bit late to the party” when it comes to childcare while the Institute for Fiscal Studies (IFS) has said it is “highly uncertain” what impact Jeremy Hunt's extension of free childcare will have on the labour market.

Key Points

• Martin Lewis to continue reaction to Budget

• Jeremy Hunt childcare reforms face criticism

21:04 , Liam James

Martin Lewis has closed the show for tonight. Scroll through for the main tips from his money saving expert programme.

Don’t give birth til next December to get full childcare benefits

20:59 , Liam James

Martin Lewis turns to one of the more talked about points from the Budget: Childcare reforms.

Jeremy Hunt said the government will gradually extend free childcare so all under 5s are entitled to 30 hours free childcare a week if their parents earn less than £100,000 a year together.

The scheme will be rolled out over from next Spring until Autumn 2025. Mr Lewis says this means: “to get the full gain from this you need to be born in December 2024.”

‘What do the changes for energy and pre-pay metres actually mean?'

20:51 , Liam James

An audience member asks about the energy price guarantee.

Martin Lewis hands over to Jeremy Hunt, who said yesterday: “High energy bills are one of the biggest worries for families, which is why we’re maintaining the energy price guarantee at its current level.

“With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”

After a cheeky nod to his long term campaign for energy price support, Mr Lewis said: “Some people won't like this but sometimes when you campaign for something for years, its important to say thank you when they get it done. So thank you to the chancellor.”

On the energy credits which the government has paid out over winter, he said: “The £66/67 a month you are receiving for energy bills is going to stop in April ... so you need to budget for that change.”

Help-to-save accounts extended: You may be eligible

20:43 , Liam James

Martin Lewis said an important but little mentioned measure in Jeremy Hunt’s Budget was the extension of the Help to Save scheme.

“If you get working tax credits or Universal Credit you are probably eligible for a Help to Save account,” the money saving expert said.

Help to Save is a type of savings account that allows those entitled to get a bonus of 50p for every £1 they save over 4 years.

‘No change can be big change’, says Martin Lewis

20:40 , Liam James

Martin Lewis said the Budget had more changes than at first obvious due to what he calls “fiscal drag”.

The term refers to the treasury earning more money without raising taxes simply by freezing the tax threshold, so more people enter higher bands.

The Treasury will raise an extra £120bn over the next five years through “fiscal drag”, according to latest Budget forecasts.

Martin Lewis on air

20:33 , Liam James

The Moneysavingexpert has started his Budget 2023 special.

Viewers are invited to send their questions on Twitter with the tag: #martinlewis

More people think they will be poorer than richer

20:25 , Jane Dalton

Nearly twice as many people think their finances will be worse in a year’s time as think they will be about the same, a poll by Mr Lewis found.

Nearly half - 49.3% - said they would be worse off, 26.5% said they would be about the same and only 16.3% thought they would be better off, according to his poll.

Rollout of free childcare ‘different from what many think'

20:00 , Jane Dalton

The rollout of government plans to fund childcare are different from what many think, Martin Lewis says, hinting he would explain during his programme.

In Wednesday’s budget, the chancellor announced 30 hours of free childcare for all under-5s from the moment maternity care ends, where eligible.

Jeremy Hunt said: “It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60%.

“Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.

“Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.

“From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under-5s will have access to 30 hours free childcare per week.”

ITV airs show later in Scotland

19:30 , Jane Dalton

The Martin Lewis Money Show will be live on ITV at 8.30pm in England and shown later, at 10.45pm, in Scotland.

Watch: Mick Lynch labels Jeremy Hunt's policies 'a Budget for the rich'

19:00 , Emily Atkinson

‘Back to work’ pensions reforms risks costing Treasury £100,000 a job, think tank warns

18:15 , Emily Atkinson

Jeremy Hunt’s multi-billion pound pensions giveaway in the Budget may not increase the number of people in work and could open an inheritance tax loophole for the wealthy, experts have warned.

The highly-respected Institute for Fiscal Studies (IFS) think tank said the policy risked costing £100,000 per job, as it warned households will feel “continuing pain” over the next year as wages fail to catch up with prices during a “lost decade” of living standards.

Mr Hunt used a ‘back to work’ Budget to abolish the tax-free cap on pensions savings and announce plans to expand free childcare to toddlers.

Our politics and Whitehall editor Kate Devlin has more:

Pensions reforms ‘risks costing Treasury £100,000 a job’

Absolutely nothing in Budget on public sector pay, SNP claims

17:45 , Emily Atkinson

The SNP’s Chris Stephens claimed there was “absolutely nothing in the Budget on public sector pay”

The SNP frontbencher added: “While the pension cap cuts may help our NHS retain doctors, this could have been limited to medicine or the NHS rather than a lifetime tax cut for the wealthy. The only mention was that cutting public sector debt could lead to more money for public services without actually announcing more money.

“Public sector pay bodies noted that only a 3.5 per cent pay rise is affordable in the current Treasury allocation and they chose not to put anything else to address this. That is, as the Institute for Fiscal Studies said, a political choice.”

He added: “There are strikes all over the country and it is striking that there was nothing said, and there is nothing here about it.”

Tory peer fears high taxation ‘group think’

17:00 , Emily Atkinson

Former Brexit minister Lord Bridges of Headley said he feared the government was “slipping into group think” that higher spending and taxes are the path to prosperity.

Lord Bridges, who is also chairman of the Lords Economic Affairs Committee, said: “While the minister in her opening remarks was Tigger, brimming with optimism, I am more Eeyore.

“Let me start with the state: it will grow. And this is the case in many other nations, it seems we are in a new era of a bigger state.

“As a percentage of GDP, spending - which back in 2020 was set to decline - will reach its highest levels since the 1970s.”

The Tory peer warned: “From where I stand, I fear we are in danger of slipping into the group think that higher spending, higher taxes and a bigger state are the path to prosperity - they are not.

“They will snuff out the enterprise, innovation and investment we need to power growth.”

Just one in three Britons think Budget will be good for economy, snap poll shows

16:15 , Emily Atkinson

Jeremy Hunt has unveiled his spring budget, with plans to expand free childcare, boost pensions and freeze fuel duty.

But according to a YouGov snap poll, just 28 per cent of Britons think his announcements will be good for the economy, with one in five (22 per cent) saying it will be bad.

Half of those asked in the survey, taken shortly after the chancellor made his statement to the Commons, did not yet know either way.

Mustafa Javid Qadri reports:

Just one in three Britons think Budget will be good for economy, snap poll shows

‘Very easy’ to devise bespoke pensions scheme for doctors, says Starmer

15:30 , Emily Atkinson

It would have been “very easy” for the Chancellor to have come up with a bespoke pensions scheme to help retain NHS doctors rather than produce a “£1 billion giveaway to the richest”, according to Sir Keir Starmer.

His comments come after Jeremy Hunt criticised shadow health secretary Wes Streeting, who he said had called for the lifetime allowance on pensions to be scrapped to boost doctor retention but had shifted his view “overnight” after it was announced in the Budget.

Labour leader Sir Keir, asked by broadcasters about Mr Streeting’s view during a visit to The Roslin Institute laboratory near Edinburgh, said: “I recognise that we need to retain our doctors.

“What Wes Streeting and I are clear about is there could have been a tailor-made approach for doctors but in the end we’ve spent £1 billion on the richest 1 per cent while everybody else is struggling with the cost-of-living crisis.

“I think most people would say, ‘How on earth can that be a priority for the government?”’

Asked whether it would have been overly bureaucratic to produce a bespoke pensions system for doctors, Sir Keir replied: “It is very easy to bring in a tailor-made approach just for doctors.

“It was done for judges just a few years ago and so the idea that a £1 billion giveaway to the richest 1 per cent was necessary just falls apart the moment it is examined.”

Lowest paid to ‘proportionately benefit the most’ from Budget, Tory MP insists

14:50 , Emily Atkinson

The work and pensions secretary said the lowest paid would “proportionately benefit the most” from the Budget, adding it was a “myth” that older people will not return to work.

Mel Stride pointed to the distribution analysis that accompanied the Budget, saying: “Those in the lowest income deciles proportionately benefit the most from the measures in this Budget. It is thoroughly progressive.”

He also told MPs: “Let me slay one myth, that older people will never return to work. In fact, we know that four in 10 50-to-65-year-olds who have left their jobs since the start of the pandemic would consider returning to work.

He added: “The chancellor introduced significant encouragement to the over 50s by the changes he made to the lifetime allowance for pensions yesterday.

“And we also know that many people overestimate how far their savings and pensions will go in retirement. And so to help more people who are in their 40s and 50s get a reality check about what decisions on retirement mean for their long-term wealth and wellbeing, we are digitising the midlife MOT.

“This will deliver a five-fold increase in the number of universal credit claimants who access the tool each year in job centres. We will also work with employers and pension providers to help nudge people to access it.”

Government ‘late to party’ on childcare reform

14:10 , Emily Atkinson

Shadow chancellor Rachel Reeves said the government is "a bit late to the party" when it comes to childcare.

Speaking about the childcare plans announced in the Budget, she told BBC Radio 4's Today programme: "We back these plans. We wouldn't have got into this mess in the first place because we wouldn't have scrapped the infrastructure that the last Labour government created.

"And I think a lot of people who, like me, people who've got kids who are already in primary school will be saying, well, you know, it's great that the Government have got to this point, but they're a bit late to the party, frankly, because many mums and dads have struggled on their own for the last few years, the last decade, when support for working parents has been taken away.

"And now they're saying after the next election there's going to be more support for childcare.

"Well, absolutely, because we hope there's a Labour government after the next election, and we will make childcare and working parents a priority."

Institute for Fiscal Studies criticises government’s childcare reform plans

13:30 , Thomas Kingsley

The Institute for Fiscal Studies (IFS) has said it is "highly uncertain" what impact Jeremy Hunt's extension of free childcare will have on the labour market.

In his Budget analysis, IFS director Paul Johnson said such a significant move would bring "risks" for the childcare market if it was not properly funded.

He added: "The impact this will have on labour supply is highly uncertain, though the OBR score it as the biggest policy contribution to increasing numbers in work.

"The main effect will be to reduce the cost of childcare for those working parents who would have paid for childcare anyway."

Mr Johnson said scrapping the pensions lifetime allowance was also unlikely to play a "big part" in increasing the numbers of people in work while being very expensive.

"Even on OBR's, in my view optimistic, assumptions this will come in at £100,000 per job," he said.

"The lack of any coherent strategy here remains deeply disappointing."

Jeremy Hunt defends his childcare reforms

12:51 , Thomas Kingsley

Jeremy Hunt has defended the speed of the rollout of his Budget offer of free childcare for working parents with children under the age of five, a policy which will not be fully available until September 2025.

The Chancellor told Sky News: "This is the biggest transformation in childcare in my lifetime.

"It is a huge change and we are going to need thousands more nurseries, thousands more schools offering provision they don't currently offer, thousands more childminders.

"We are going as fast as we can to get the supply in the market to expand.

"But it is the right thing to do because we have one of the most expensive childcare systems in the world and we know it is something that is a huge worry, for women in particular, that they have this cliff-edge when maternity leave ends after nine months, no help until the child turns three and that can often be career ending.

"So I think it is the right thing to do for many women, to introduce these reforms and we are introducing them as quickly as we can because we want to remove those barriers to work."

Welcome

12:49 , Thomas Kingsley

Good afternoon and welcome to The Independent’s coverage of Martin Lewis’ Money Show airing later this evening where the money saving expert will give his reaction to Jeremy Hunt’s Budget.