Today (06 March) the Chancellor, Jeremy Hunt, announced various changes to taxes and public spending in his 2024 Spring Budget.

As usual, many of these changes were leaked beforehand – but there were several unexpected announcements. This post focuses purely on personal finance news but there were many other announcements regarding benefits and business.

If you are affected by any of today’s announcements, or would like to review your finances to check, you can book a free initial appointment with one of our advisers.

Call 01642 477758 or email

National Insurance

It was widely rumoured that Hunt planned to reduce the main rate of National Insurance contributions by 2p, and this went ahead as planned. The main employee rate will reduce from 10% to 8% and the self employed rate will reduce from 8% to 6%

There were reports of internal debate between Sunak and Hunt regarding whether the income tax rate or the National Insurance Contributions rate should be cut. An income tax rate cut would benefit all taxpayers whereas a National Insurance Contribution rate cut will only benefit workers.

Hunt has made a point of championing workers in recent months, so today’s announcement is in line with his beliefs.

Hunt also announced a plan to eventually abolish National Insurance Contributions altogether, deeming it “unfair” that workers pay both National Insurance Contributions and income tax while the retired and those with so-called “unearned” income (dividends and rental income) only pay income tax.

However, he acknowledged this would be a massive change and said it will only ever happen following consultation and if it is affordable to do so.

Child Benefit

Child Benefit is currently £24 per week for the first child and £15.90 per week for each additional child. In 2013, rules changes meant households where one or more parent earns more than £50,000 would start to lose some of their child benefit (the “High Income Child Benefit Charge”).

The monetary amount of £50,000 has not changed since then. If it had risen in line with inflation, it would now be nearly £70,000. This means more and more households are losing Child Benefit over time.

Even ignoring the lack of an increased earnings threshold, this is considered a somewhat unfair policy because it is based on a single earner. A household where both parents earn £49,000 will keep all their child benefit, but a single parent earning £60,000 will get nothing.

The thinktank Tax Policy Associates created the graph below, showing the effective tax rate paid by a single parent household with three children at different levels of income:

Tax Policy Associates Marginal Tax Rate Chart

Today, Hunt announced the earnings threshold will increase from £50,000 to £60,000 from the new tax year.

A consultation will also be launched regarding how HMRC can assess income at a household level rather than individual level, with the aim of setting a household income cap which would reduce the unfairness of the High Income Child Benefit Charge. However, but this will not be complete until April 2026.

If you will be affected by the High Income Child Benefit Charge, you could consider making a pension contribution (if it is appropriate to do so in your circumstances).

Please get in touch if you wish to discuss this with one of our advisers.

Income Tax

Disappointingly, there will be no increases to the Personal Allowance, the Dividend Allowance, or the Personal Savings Allowance.

Respectively, these allowances set how much taxable income, dividend income, and interest income can be earned before paying income tax.

The lack of a Personal Allowance increase will be particularly irritating for older pensioners whose only income is the State Pension. With rises in the State Pension in recent years (under the “triple lock”), many people have State Pension income which is greater than the Personal Allowance. The State Pension is classed as taxable income, but no tax is automatically taken from it.

Instead, any income tax liability is normally taken from other private pension income. But many pensioners do not have private pension income. Pensioners who have no private pension income but who are liable to pay income tax on their State Pension will have to identify this issue themselves and then contact HMRC to discuss how to make a payment.

The Dividend Allowance was originally introduced at £5,000 before being quickly cut to £2,000. It was then reduced to £1,000 in the current (2023-24) tax year and it will reduce to £500 on 06 April 2024 – just one-tenth of its original amount, despite significant rises in inflation and yields in the meantime.

Unlike interest, dividends are not automatically reported to HMRC. This means the onus is on the recipient to assess whether they have breached the Dividend Allowance and then contact HMRC accordingly.

The government website states you can either call HMRC or adjust your tax code via the government gateway if you have up to £10,000 of dividend income but, otherwise, you must complete a self assessment tax return.

Someone with just £14,000 in FTSE 100 shares will breach the dividend allowance in the next tax year1.

The Personal Savings Allowance (the amount of interest one can earn without paying income tax) has been stuck at £1,000 (or £500/£0 for higher rate/additional rate taxpayers) for years, despite significant increases in average interest rates in the meantime.

Just a few years ago, a basic rate taxpayer would need around £200,000 in bank savings to breach this allowance2. Now, they would only need around £20,0003.

The reduction in the Dividend Allowance and freezing of other allowances makes the use of tax wrappers – such as ISAs, personal pension plans, and Investment Bonds – all the more useful.

Please get in touch if you wish to discuss how to reduce your tax exposure on your savings and investments.

Capital Gains Tax

Hunt announced a reduction in the higher rate of Capital Gains Tax payable on property transactions, from 28% to 24%. This change will be made on the basis it could raise more tax revenue overall because of an expected increase in transactions.

There were no other measures relating to Capital Gains Tax, which means the planned reduction in the allowance (the “Annual Exempt Amount”) will reduce from £6,000 to £3,000 from 06 April.

Inheritance Tax

There were regular rumours that Hunt planned to reduce, or even abolish, Inheritance Tax. While it remains widely unpopular, it is only paid by small percentage of estates. Despite this, it raises around £7bn each year – money the Chancellor can ill afford to go without.

As expected, there were no major announcements regarding changes to Inheritance Tax. It is considered likely the Conservatives will include promises to significantly soften Inheritance Tax rules in their election manifesto.


Hunt announced a consultation on a UK ISA product, with a contribution limit of £5,000 as long as the money is invested in “UK equities”. This will be a standalone product.

It is currently unclear whether this will only allow investment in direct shares or if it will include funds which wholly or primarily invest in UK shares. This is considered as part of the UK ISA Consultation Paper, which asks whether funds holding more than 75% of their assets in UK shares should qualify for investment.

We believe allowing investment funds to be included within a UK ISA will be highly beneficial for investors, because funds allow investors to diversify their portfolio and appoint a professional fund manager.

In announcing this product, Hunt acknowledged the ISA allowance will remain at £20,000 – for the eighth tax year in a row.

Confusingly, Hunt (and others in government) referred to this as a “British” ISA but the official Budget document refers to it as a “UK” ISA.

This is an interesting development. UK investors tend to favour foreign shares in both ISAs and pension funds, so this will no doubt encourage investment in UK companies. However, only around 7% of people fully fund their £20,000 ISA, so relatively small numbers of people will benefit from this supplementary allowance.

In addition, UK share markets make up only around 10% of global share markets (by value), and we often remind investors to beware of “home bias” – where investors choose domestic shares over potentially better-performing foreign shares on the basis they are more familiar with domestic companies.


“Non-dom” status can be claimed by people who live in the UK but have historically lived abroad. It allows them to avoid paying UK income tax on income generated from non-UK assets. Famously, Rishi Sunak’s wife claimed non-dom status until public pressure lead to her renouncing it.

While they are relatively easy pickings for a Chancellor looking to fund tax cuts or extra spending, it is widely acknowledged non-doms contribute significantly to the UK economy.

Hunt announced the current non-dom system will be modified, allowing new arrivals to avoid paying UK income tax on non-UK income for up to four years but then becoming liable thereafter.

More controversially, more of these people will be dragged into paying UK inheritance tax on their foreign assets.


This Budget was viewed as a key test for Hunt. It could be his last, unless the Tories defy the odds and beat Labour in the next general election.

He was very much being pulled in two directions – Tory MPs were keen to see tax cuts in order to boost support in an election year, but Hunt is keen to be seen as fiscally responsible.

On top of this, Hunt can no longer rely on what has become a hallmark of Budgets under the current government; the freezing of tax allowances in order to gradually collect more tax as incomes and asset prices rise over time (so called “stealth taxes”). This works best when inflation keeps going up, and the rate is starting to slow. This has the effect of limiting the future impact of these stealth taxes, and so reducing Hunt’s tax cutting power.

In many ways, it is surprising Hunt chose to cut National Insurance Contributions rather than reducing income tax (either by cutting the income tax rates or by increasing the Personal Allowance). We are in an election year and the latter would help pensioners, who are keen voters. This could simply be because cutting income tax would cost more.

Overall, today’s combination of announcements rewards workers, particularly those with children, who are keen to invest in UK shares.

1 £14,000 at the current dividend yield rate of 3.80% on the FTSE 100 stock market index gives dividends of £532 per tax year.

2 £200,000 at a typical interest rate of 0.50% gives interest of £1,000 per tax year.

3 £20,000 at a typical interest rate of 5.00% gives interest of £1,000 per tax year.