The Chancellor termed it ‘a budget for future generations’ but whilst some young people will benefit, the less advantaged are unlikely to.
The main announcements affecting young people were:
- Lifetime ISA
Those under 40 in April 2017 will be able to save up to £4,000 each year into the Lifetime ISA, and receive a 25% government contribution which will last until savers are 50.
However there are restrictions on how this is spent. Account holders will be able to access all the funds to buy a first home of up to £450,000, if they have a terminal ill-health condition, or from the age of 60. But there will be a 5% penalty if savers dip in to these funds at other times and they’ll also miss out on the government top up.
Whilst it is ‘free money’ from the government, people will have to have the means to save in the first place to benefit from this measure. Treasury calculations indicate that they don’t expect many to take up this offer.
- Rough sleepers
The Chancellor announced £110m to tackle rising numbers of rough sleepers and homelessness – an issue which particularly affects young people. This has been cautiously welcomed by housing charities but, they say, it will do nothing to tackle the root causes of the UK’s rising homelessness problem; lack of affordable homes.
- Sugar tax
A sugar levy was announced on fizzy drinks, adding around 5p to a can. The levy will kick in in 2018 with the resulting money invested in primary school sport or increasing the length of the school day in secondary schools.
- Maths teaching to 18
In what is likely to be an unpopular move with young people, the Chancellor said he would be looking in to making maths a compulsory subject to 18 years.
- Frozen benefits
Lastly, whilst it wasn’t announced yesterday it’s worth remembering that Jobseeker’s allowance (currently £57.90 a week for the under-25s) will be frozen from April, through to 2020.