What The Budget 2015 Means For Young People

First we had a budget in April; didn’t understand that. Now we’ve had a summer “emergency budget”? What’s that all about?


Hands up who was confused by the Budget 2015?

Changes to the Personal Allowance of Tax from Budget 2015

FYI; 81.6% of the UK fall into paying the basic rate of tax

George Osborne’s first budget of the new Conservative government was full of contradictions. On the one hand he is cutting £12 billion pounds from benefits (boo); one the other he’s creating a National Living Wage of £7.20 PH (YAY!)

The Emergency Budget 2015 Explained

The announced changes were met with cheers from the Tories, and outrage from the Opposition (Labour, Lib Dems, SNP, UKIP Plaid Cymru and the rest).

The Guardian has reported that the new “Living Wage” isn’t enough to make up for the cuts to welfare. People who claim tax credits could be £1,000 worse of a year according to the Institute of Fiscal Studies. Doesn’t sound great.

So how does the new budget 2015 affect you? The BBC has created a Budget Calculator. You can try it out for yourself on the BBC website; we thought we’d explore how the changes could affect different people.


Tax and Moneys

For Starters

Let’s say you’re 21/22. Perhaps you’ve just left university, maybe not.  You have a job on the minimum wage (currently £6.50 PH) working 40 hours or so a week. Your annual earnings would probably be around £13,000.

Calculation from the BBC showing if you are better or worse off from Budget 2015

£80 better off. Get in! Via BBC

Because the tax-free allowance is going up to £11,000 you’d end up around £80 better off. Yipee!


There’s more

So, lets look at the claim from the Guardian that due to changes to tax credits some people could be £1,000 worse offTax Credits are benefits (extra £££) given to people who look after children, to disabled workers and those on lower incomes.

In the new budget “working-age benefits, including tax credits and Local Housing Allowance, will be frozen for 4 years from 2016-17”

The calculator says a married couple with a combined income of £21,600 and two children could be worse off by £1,113. Hmm.

Calculation from the BBC showing if you are better or worse off from Budget 2015

Looks like the Guardian was right. Ouch. Via BBC

This was based on one partner earning £19,000 a year on full-time hours; the other working part-time and earning £2,600. Both at 25 (still young!) and the age you’ll become eligible for the new “Living Wage”.

Though they are £80 better off thanks to changes to income tax, on the whole they make a loss because they are getting less tax credits. In fact, the calculator suggests that in order to keep the same income they had before, the partner (who originally earned £2,600 a year) would have to earn an extra £10,978.56! Whether this is the case, we don’t know. But we sure hope not!

Calculation from the BBC showing if you are better or worse off from Budget 2015

Breaking even

Removing the two children from the equation means we’re back to £80 better off. Does this mean we shouldn’t have kids?!

Looks a bit like The Guardian 1, Osborne 0.


So are things better for older people?

An older married couple with a combined income of £85,000 would actually be £221 better off. Say what?

Calculation from the BBC showing if you are better or worse off from Budget 2015

Osborne’s changes are designed to help those on “middle incomes” Via BBC

This is again because of the changes to the tax thresholds where you pay the higher rate of tax.

Does this mean the budget will be better for the rich and worse for the poor? Although the media might say “YES”, it’s a lot more complicated than that. Like any example these calculations are very specific. Everyone has different circumstances so it’s probably impossible to come up with a basic rule which covers everyone.

It’s also worth saying (because the BBC did) that these figures are estimates only. They don’t include all the changes made; just the ones made to income and earnings.

People are still unhappy though. And if you’re under 25 you might be too. Whilst others get the fancy new “Living Wage” of £7.20 PH you’re going to be stuck on £6.50 PH. Minimum-bleugh.


What the calculator doesn’t include

The budget 2015 wasn’t just about tax and income; it covered a whole range of topics. The speech was even a few minutes longer than usual. Crazy times.

Forget University

One of the major policy brought in by the coalition government which affected young people was the raising of tuition fees. The new budget only raised them in line with inflation; but Student Maintenance Grants are being scrapped. These are non-repayable £££’s which are given to students from low-income backgrounds.

Instead of grants students will have to take out Student Maintenance Loans instead. Conservatives say “Don’t worry, you won’t have to pay them back until you’re earning £21K +”. As well as paying back tuition fees.

At the moment around half a million students in England receive grants. However some people aren’t too bothered;



Where am I going to live?

So, you need somewhere to live. Don’t count on the government paying however. The Conservatives are stopping the automatic entitlement to housing benefit for 18-21 year olds.

Housing benefit is a regular £££’s to help pay your rent. It’s paid by your local council.  You can claim it if you’re on a low-income or claiming other state benefits.


Why the hate for the young?

So, not the best of times if you’re young and/or a student. George Osborne says he wants to make the tax and benefits system fairer.

“We have to move Britain from a low-wage, high-tax, high-welfare society to a higher-wage, lower-tax, lower-welfare economy.

For Britain is home to 1% of the world’s population; generates 4% of the world’s income; and yet pays out 7% of the world’s welfare spending. It is not fair to the taxpayers paying for it. It needs to change.

The best route out of poverty is work. It is not acceptable that in an economy moving towards full employment, some young people leave school and go straight on to a life on benefits.

– George Osborne’s Budget 2015 speech


It’s not just young people who are affected by the budget. But even so, the Guardian asks “What have young people done to deserve George Osborne’s contempt?”. We’d love to hear from Mr. Osborne himself. So if you’re reading, George – is it personal?!


Budget 2015 learnings; some good, some bad, some ugly.

Is Budget 2015 unfair to young people? Or should people stop moaning about benefits and go and get a job?

Subscribe to our weekly explainer The Week: Decoded, like us on Facebook and follow @scenesofreason

The Emergency Budget 2015 Decoded; what’s changing for us now?

Now the Conservatives are in power, Chancellor George Osborne announced an Emergency Budget to improve Britain’s finances. As always, Scenes of Reason decodes the Emergency Budget 2015 for y’all. 


The Emergency Budget 2015; what was said?

In Brief

Emergency Budget; The Deficit Decoded

The Conservatives want a surplus by 2020. Meaning lots of cuts. Achievable?

Big cuts are coming to the public sector. But reductions in tax for those with low and middle incomes might sweeten the deal.

As in the previous budget, Osborne started with the good news. Britain’s economy is growing faster than any other advanced economy in the world. In fact the growth for last year was 3% higher than the 2.4% estimated.

But. There’s always a “but”.

The Greece Crisis shows the importance of getting our affairs in order.

The Conservatives have announced further cuts to benefits and public services. This was to be expected; it’s what they said they would do. People expected that the cuts would be quick and brutal. But the big surprise of the day was that the cuts announced by Osborne will be brought into effect much more smoothly and over a longer period of time.

No more borrowing; the Chancellor pledges to run a budget surplus by 2020.

What is the Budget?


Key Points

– £12 billion to be found in cuts to Welfare benefits. These cuts will be detailed in a document released tomorrow.

The Emergency Budget; a magician pulls a rabbit out of a hat, the announcement of a National Living Wage was greeted with cheers

Like pulling a rabbit out of a hat; the big announcement was a “Living Wage”

– Sorry Students; your Student Maintenance Grants are gone. You’ll have to get a loan from 2016/17. But there will be a consultation on freezing no repayment until you earn £21,000.

– The amount you can earn before you pay any tax, goes up to £11,000. The amount before you pay highest amount of tax goes up from £42,385 to £43,000 next year.

– Introduction of the National Living Wage of £7.20PH for those aged 25 and over. This will rise to £9PH by 2020.

– £8 billion will go to the NHS as promised in the Conservative manifesto.

– Nom-Doms beware. Permanent Non-Domicile status (where you pay less tax if you are registered as living abroad) will be abolished and you will no longer be able to inherit Non-Dom status. Osborne nicked this idea from Labour’s manifesto. Cheeky.


Emergency Budget; an usher hands out sweets at a performance

No more giveaways. Cuts to benefits means work pays.

– More money will be given to HMRC to catch tax evaders and tackle tax evasion. Smart move genius.

– The Bank Levy (which taxes the debts of banks) will be replaced by a new 8% charge on bank profits. Is this an attempt to stop HSBC moving to Asia?

– Fuel Duty (tax on fuel) remains frozen. New bands for Vehicle Excise Duty (tax paid on vehicles on the roads) to be introduced; the money collected will go into making new roads. Neat.


– Create a “Northern Powerhouse”; Manchester will get control of the fire service, a land commission and employment programmes. Similar options will be discussed with other northern cities. Local authorities around the country will get the power to set Sunday trading hours in their area.

– Changes to inheritance tax means parents will able to pass on properties worth £1 million to their children without being taxed. Londoners rejoice.

The Emergency Budget has to find £12 billion in cuts

No more giveaways; lots of cuts to benefits and the public sector

– Companies pay Corporation Tax (a tax on their profits). The amount of tax they pay will drop from 20% to 19% in 2017. It will lower to 18% in 2018.

– Watch out BBC. They’ll be funding free TV licences for over-75s; a duty recently held by government.

– 18-21s will “earn or learn”. There will be no automatic entitlement for housing benefit, except for the vulnerable (who aren’t able to look after themselves due to factors including mental illness or physical disability). Benefits for those of working age will not rise for four years. The total benefits cap for unemployed families will be reduced to £23,000 in London and £20,000 for the rest of the country. Child Tax Credits limited to two children per household from 2017. These cuts to benefits did not go down well with the Opposition parties.

– 30 hours a week of free childcare for parents of 3-4 year olds.

– Rents for social housing reduced 1% a year for the next four years.

– You can sleep easy, Britain; there will be annual increases to the defence budget.


What are people saying?

There were lots of boos from the Opposition parties when the benefits cuts were announced. Labour Deputy leader Harriet Harman claimed he was making life worse for working people. She also questioned his figures on economic growth. But she also said that the Labour party was prepared to look at sensible proposals and not just block everything the Tories come up with. Seems fair.

Online Natter;

Twitter Reaction to the Emergency Budget 2015


Explore in detail

Emergency Budget 2015; the key points

Chancellor George Osborne’s Emergency Budget 2015 Speech

Opposition Leader Harriet Harman’s speech responding to the Emergency Budget


Budget 2015 Explained; the cuts will be slower than expected, but they are coming. Not good news for students and under 21s; no grants or higher wages for you. However, tax breaks and the “living wage” are an attempt to put the Conservatives on the side of working people.

Do you agree with the cuts made by George Osborne in the Emergency Budget? Do you trust the Conservatives to sort out the economy?


Subscribe to our weekly explainer The Week: Decoded, like us on Facebook and follow @scenesofreason

The UK Budget Explained And Why Is Today Important?

There is no arguing that budgeting is important, but doing so is not always so easy. Though it gets a little more complicated when you’re managing funds for the whole country.

The guy above is George Osborne. He is Chancellor of the Exchequer – which is a posh way of saying he’s in charge of the country’s money.


The UK Budget: Explained

UK Public Services paid by Taxes

Will we see further cuts to Public Services?

The Budget (it’s important so it gets a capital B) is a breakdown of where the money from Her Majesty’s Treasury is spent.

Money is collected through tax by Her Majesty’s Revenues and Customs and is spent on public services – such as roads, hospitals, education.

The Budget is usually released in March – just before the start of a new financial year, which starts in April (we’ll leave that one for another time).



What’s Going On Today?

At 12.30PM today, Osborne will announce the new budget to Parliament, outlining the state of the British economy and the changes the new Conservative government will be making. It will be a chance to see if he sticks with his earlier promises made before the election.

If you’re a big politics fan you can watch on BBC Parliament (a whole TV channel devoted to British politics .. who knew?!) from 12PM.

What Does This Mean?

This is an emergency budget. The Tories weren’t expected to win a majority so the previous budget was a compromise with what they wanted to do, and what they thought they’d be allowed to do with their pals in coalition.

Now we have a Conservative majority George Osborne can pretty much do what he wants.

Watch out for phrases like Long Term Economic Plan (we have a plan) and Stable Growth (Progress slower than expected).

Read our breakdown of the previous budget: The Budget: Decoded