How the Spring Budget affects you: the First Wealth view

The cut in national insurance dominated headlines, but there were plenty of eye-catching measures in this month’s pre-election Spring Budget. That list includes changes to property tax, a new tax-free investment vehicle and reform of the ‘non-dom’ tax status.

Tax cuts

National insurance contributions on labour income – which nets the Treasury some £172bn and is about 16% of all tax receipts – are coming down.

They are being reduced by 2% for both employees and the self-employed (meaning the latter falls from 8% to 6%).

All the analysis we’ve conducted and seen suggests this will boost take-home pay for many – by slashing overall tax by a few percentage points.

The Financial Times created a handy calculator here to show exactly what this means in pounds and pence. For example, if your annual gross salary is £50,000, your monthly salary could go up by £62.37 (6.67% less tax). For those earning £150,000, the equivalent numbers are £62.82 and 1.27%.

Tax rises

But, as so many chancellors do, Jeremy Hunt gaveth with one hand and tooketh away with the other.

The allowances and tax thresholds frozen in April 2022 will remain so until 2028. As wages rise, so more workers creep into higher tax thresholds, increasing the overall tax intake.

The Office for Budget Responsibility has previously said this will net the government an extra £44.6bn in 2028-29.

There was also the abolition of a colonial hangover rule: the taxation system for individuals whose permanent home, or domicile, is considered to be outside the UK. ‘Non doms’.

It’s being replaced with a residence-based system. All UK residents that stay in the UK for over four years will pay the same tax on foreign income and gains, regardless of domicile status.


Jeremy Hunt has spent some time talking with the investment industry about channelling more savers’ money into UK companies.

Last year he urged large pension funds to do so. Now, he has announced measures that will apply to retail money.

First is the ‘UK ISA’. It’s an opportunity to allocate £5,000 tax-free to UK-focused assets – namely those listed in London.

It sits on top of the existing £20,000 ISA allowance, which hasn’t gone up since 2017-18. The government will consult with the investment industry on turning the new idea into products but, when they arrive, UK ISAs should be a valuable method of shielding wealth from capital gains or income tax.

The second is a new product from National Savings and Investments. These low risk, government-backed vehicles are often a handy way of saving money. This recent announcement of the British Savings Bond will offer a guaranteed interest rate, fixed for three years. We’ll need to see the detail on both this and the ISA first but any new savings and investment vehicle is always welcome.


Gold-plated final salary schemes have been disappearing over the horizon in recent decades, replaced by ‘defined contribution’ pensions. One of the issues with the latter is how to work out whether you (or your employees) are getting a good deal – because apples versus apples comparisons are so hard in this market.

New transparency measures will address this. And poorly performing workplace pension schemes will be banned from taking on new business.

So, if the latter applies to you, you’re likely to have a better view of what better pension options might look like.


Changes in the way property is taxed is likely to affect many of our clients, in different ways.

The Furnished Holiday Lettings tax regime is being abolished. In other words, you’ll no longer be able to claim tax relief on your mortgage payments or spending on furniture and appliances.

Moreover, multiple dwellings will no longer be exempt from stamp duty land transaction tax. The measure was originally intended to encourage landlords to invest in the private rented sector – but after ‘no evidence’ was found the measure worked as intended, it’s being withdrawn.

Jeremy Hunt also announced the higher rate of capital gains tax on residential property is falling, from 28% to 24%. This applies to only a small proportion of property transactions but is intended to encourage people to sell second properties and get them on the market, to ultimately boost home ownership.

Overall, the Chancellor emphasised the hard economic choices facing him and the country in his much awaited Spring Budget. And he later took to the airwaves to dismiss the notion that any of his proposals are gimmicks.

For sure, many – though not all – of the measures in this year’s Spring Budget will be welcomed by us and our clients. But it remains to be seen how long they last, with an election presumably looming later this year.


If you’d like to discuss any of the above or how the Spring Budget affects you, please get in touch on or call 020 7467 2700.




This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Let's Talk

Book a FREE 30-minute Teams call and we’ll answer your questions. No strings attached.

Check Availability 

You are now leaving First Wealth's website

First Wealth (London) Limited does not endorse the linked website or any of its contents, and is not responsible for the accuracy of the information contained within it.