Now that the initial fanfare that greeted the Chancellor’s Budget has subsided, and the column inches containing speculation and immediate reaction have become today’s fish and chip paper, it seems the perfect time to review the measures contained in Hammond’s little red box.
Before the Budget was announced, I asked whether the Chancellor would be writing a child-friendly budget. Would he include, for instance, measures to boost youth savings? Were we about to see the ring-fencing of funds to pay for experts to go into schools to teach children how to budget, the importance of saving and how our financial services system works?
No, it turns out we weren’t. In fact, it was a missed opportunity; a budget with almost no provision for savers – of any age.
Of course, savers weren’t totally ignored: the Individual Savings Account (ISA) allowance for 2018/19 is to be frozen at £20,000, for instance. There were a few measures to help younger people, too: the introduction of a ‘millennial railcard’; the relaxation of stamp duty for first time buyers; and the increase in the annual subscription limit for Junior ISAs and Child Trust Funds for 2018-19 to £4,260. But, overall, children and savers were overlooked. As one commentator put it: ‘for savers, this budget echoed with the ‘sound of silence’, with not a single mention of savings and more to be said about what wasn’t included than what was.’
At a time when UK household debt is at the highest it has ever been, it is curious that the Budget was so deafeningly silent on savings measures. At best, Hammond’s tweaking of ISA allowances can be described as fiddling around the edges, at worst, he has missed a crucial opportunity to help UK savers.
It’s not just a short-term failure, though. In omitting any substantive measures to further incentivise saving, Hammond risks undermining the great work schools are doing to teach young people the benefits of saving. Encouraging young people to look after their money must not stop in the classroom, it needs to be supported by an active Chancellor, too. We need to give our children a helpful ‘nudge’ by making saving as financially attractive a proposition as possible.
The question, then, is if Hammond wants to encourage tomorrow’s workforce to learn the value of money early, will we see future Budgets include more provisions? The Government has taken steps in the right direction by introducing financial literacy education to the national curriculum – so I am cautiously optimistic.