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The Actuary The magazine of the Institute & Faculty of Actuaries

Extra social care funding announced

Philip Hammond has announced that social care will receive an additional £650m in funding over the next financial year in his autumn budget today.

Chancellor also revealed better growth prospects ©Shutterstock
Chancellor also revealed better growth prospects ©Shutterstock

This will bring the total social care funding announced this year to almost £1bn, while new spending measures for mental health services were also unveiled.

The chancellor confirmed that the personal tax allowance would increase to £12,500 in April next year, and that the higher rate tax threshold would rise to £50,000.

Saving limits for individual saving accounts will remain at £20,000 for the next five years, while Hammond also earmarked £5m for the pensions dashboard over 2019-20.

Despite welcoming the extra social care funding, Aegon pensions director, Steven Cameron, described it as little more than “a temporary, sticking plaster measure”.

“Our ageing population urgently needs a stable agreement on what the state will pay and how much individuals will have to fund themselves,” he continued.

“While implementing a new approach may need to wait until after Brexit is done and dusted, the government can’t afford to keep pushing important policy discussions into the long grass.”

Hammond also revealed today that the Office for Budget Responsibility has revised GDP growth for 2019 up from 1.3% to 1.6%, but that this is set to fall back to 1.4% in 2021.

He announced that Universal credit, which he described as “a major structural reform to our economy”, would get an £1bn extra of funding over a five-year period.

In addition, he outlined how £200m would be available to replace loans from the European Investment Bank after Brexit, and increased the investment allowance from £200,000 to £1m for two years.

“This may well simply be an attempt to encourage businesses to invest in machinery and other equipment in order boost productivity,” HW Fisher & Company corporate tax partner, Toby Ryland, said.

“But Brexit uncertainty has been holding back investment and Hammond clearly wants to give it a shot in the arm by raising the tax relief again in case Brexit turns out worse than anticipated.

“Whether it works, however, is another matter."

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