What does the 2021 Budget mean for me?

What does the 2021 budget mean for me?

Don’t worry if you’re trying to work this out still. Chancellor Rishi Sunak stood up in the House of Commons and spoke for nearly an hour this afternoon. That’s enough to confuse anyone!

I’ve compiled the key points you need to know now, based on the policies that are likely to change the most.

As more information and details are announced, I will update this post so it is a comprehensive guide for you.

  1. Employment
  2. The Self-employed
  3. Taxes
  4. Housing
  5. Mortgages
  6. Hospitality
Image Credit: HM Treasury
What does the 2021 Budget mean for me?


Job security is probably top of everyone’s priority list. The Budget did not give as much support as perhaps many would hope, but there are some positives to take away.

Firstly, the furlough scheme has been extended until the end of September. The eager-eyed might point out this doesn’t quite add up with the ‘end of all restrictions’ supposedly happening on 21st June.

Employer contributions will increase from July, but employees will still receive 80% of their wages.

While many are desperate to get back to work, the extension may be frustrating. But, with 4.7 million currently on furlough, there was a real risk of a huge leap in unemployment at the end of April when the scheme was due to end.

In terms of new jobs, the Chancellor mainly referred to existing schemes. With projected unemployment for young people hitting 1 million, this is unlikely to be good enough.

The Chancellor referenced the Kickstart scheme, which we know is having teething issues, particularly when small businesses try to access it. It is also failing to help the majority of those eligible for the scheme.

One positive on the jobs front was in regards to apprentices. The government is going to double apprentice payments to businesses to £3,000 for all new hires, regardless of age. Given 93% of apprentices remained in employment or went onto further training in 2018/19 after their apprenticeship, this could be a real benefit.

The Self-employed

Just like the furlough scheme, the Self-Employed Income Support Scheme (SEISS) will also be extended. A further 4th and 5th payment worth 80% of average trading profits will be available. However, the 5th and final grant will only be for those most affected by the pandemic.

For the Excluded UK, there was some positive news. An extra 600,000 people will be eligible for these final two grants. The scheme now includes “new starters”, providing they filed a 2019/20 tax return by midnight last night.

Sadly this only helps a fifth of the estimated 3 million self-employed that have been excluded from any support so far.


There were no announcements about increases in personal taxes. This is a good thing as many households currently have no room for a squeeze on their budgets.

However, once the personal income threshold increases by £70 to £12,570 next year, it will be frozen until April 2026.

The Chancellor said “nobody’s take home pay will be less than it is now, as a result of this policy”. This is true, however a freeze is often viewed as a ‘stealth tax’.

Those receiving cost of living wage increases will see more of their income fall into the taxable bracket as the personal allowance doesn’t budge.

There is a danger that those with pay rises will get dragged into paying higher tax rates for many years to come, which is obviously not good news for households.


The Government wants to turn “generation rent into generation buy”.

Is he actually going to be able to do that? It seems unlikely.

Firstly, the Stamp Duty cut will be extended by 3 months. It will now finish on the 30 June. Then the nil rate band will taper down to £250,000 until the end of September.

For those with transactions currently in the pipeline, this good news. But, for everyone else, it is less good. The cut has already artificially inflated house prices, making buying a property even more inaccessible for most.

Housing – What does the 2021 Budget mean for me?


The other part of the plan is to provide incentives to lenders to offer mortgages to buyers with just 5% deposits. This will apply to properties worth up to £600,000.

The Government will then offer lenders the guarantee they require to provide mortgages covering the remaining 95% of a property’s price.

Previously, Prime Minister Boris Johnson said: “I want generation rent to become generation buy and these 95% mortgage guarantees help to deliver this promise.

“Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder.”

This is unlikely to help most first time buyers, who are struggling to get a mortgage for the amount they need to borrow.

It’s also not limited to those at the lower end of the income spectrum. These individuals are likely to be struggling more to get on the property ladder. To buy a £600,000 property with a 5% deposit, you’ll need a household income of around £150,000 a year. For reference, the average household disposable income (after taxes and benefits) in 2020 was £30,800.

Given the wide scope of the scheme, this could cause a surge in demand on properties, much like the stamp duty holiday is doing. This will increase prices and therefore have a negative impact on prospective buyers.

Hospitality – What does the 2021 Budget mean for me?


Tourism and hospitality have been the hardest hit industries during the pandemic. The government indicated it is keen to support these businesses, while they still can’t operate as normal.

From a consumer point of view, it’s difficult to see what impact any policies, like the extension of the VAT cut, will have on prices.

Businesses are struggling so much at the moment, so it seems more plausible that any cuts to businesses’ costs will go towards subsidising their own overheads and consumers won’t see any reduction in prices.

One positive for consumers is that the planned increases in alcohol duties will be cancelled. This is the second year in a row they have been frozen and it’s only the third time this has happened in 20 years.

So far, the freeze has saved drinkers £7.3 billion. This current cut will save consumers 2p on a pint of beer, 1p on a pint of cider, 8p on a 75cl bottle of wine and 30p on a 70cl bottle of Scotch. I’ll drink to that! When pubs open again of course…

If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences. What did you think of the Budget? Have you been negatively impacted by Covid-19? Has this answered the question: ‘What does the 2021 Budget mean for me?’ Share your thoughts below!

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One response to “What does the 2021 Budget mean for me?”

  1. […] I will cover government policy when relevant. This has been particularly helpful during the pandemic, where financial support from the government has been complicated and ever […]

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