Budget response

Chief Executive Gillian Guy said:

“There is some comfort here for lower paid workers and their families, who are struggling financially with pay freezes, rising prices and cuts to public services. Raising the personal tax allowance will take at least 500,000 people out of the tax net, and put some much needed money in their pockets.  The Government are to be commended for sticking to a road map which will eventually take all those earning less than £10,000 out of the tax system altogether.    

“But it is clear that for many working families any gains from this change are likely to be outweighed by the 1% rise in National Insurance, cuts to child tax credit and the retention of the higher VAT rate. The Chancellor has said this is a ‘fiscally neutral’ budget and it may well be that the final effect on the living standards of our most vulnerable people is similarly neutral.

“The extension of support for mortgage interest for another year is a welcome announcement which could help many desperate families to stay in their own homes. However, we are disappointed that no change has been made to the standard interest rate for support for mortgage interest which is currently below the rate most people pay for their mortgages.

“We are also pleased to see that public money will be available to help reduce water bills in the South West, where costs have been escalating and people have been struggling. This is a welcome lifeline.

“Changes to law on charitable giving will be very useful for us, such as new gift aid rules for small donations to charities, which will be simpler to administer.

“The proposal to introduce a £140 flat rate pension appears attractive. It is a sizeable uplift and removes the need to be means tested for pension credit. But questions remain about what happens to the people who have made contribution to SERPs and state second pension, and can currently expect a state pension of well above that amount.

“Questions also need to be asked about the planned consultation on the merging of Income Tax and National Insurance. For example, entitlement for a number of current welfare benefits depends on the claimant's National Insurance contribution record, and it is unclear how the proposed changes would affect these entitlements.

“We also have some concerns around the Chancellor’s proposals for reducing regulatory ‘burdens’ businesses, especially if they are at the cost of many cherished, hard-won rights and protections. In particular we would single out removing the protection from dual discrimination guaranteed by the Equalities Act 2010, which is a step backwards for protection in the workplace.”

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
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3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
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