Budget 2021 – Comments on Young Money


It’s Budget Day and Chancellor Rishi Sunak is announcing his three-point plan earlier to help businesses through the rest of the pandemic, “fix” public finances and build the future economy. Iona takes a closer look at what was said (and what was not) …


I am glad that the incentives for hiring apprentices are being increased to £ 3,000 in an effort to step up efforts to build a more practical, skills-based economy. This will be vital to spur domestic growth, which will help offset the damage caused by Covid-19 restrictions and lockdowns. However, it remains to be seen how far this will be implemented once we (hopefully) get out of the final lockdown, as the Kickstart Jobs program to provide funding for employers hiring young workers has not yet got underway. Don’t forget that the national living wage increase does not apply to anyone under the age of 21.


I had mixed feelings about the expansion of the vacation program and the introduction of restart grants and recovery loans for companies as they reopen. These announcements offer a little more security to employees who dangle a sword of Damocles over their heads. However, it was telling that hospitality businesses would qualify for more funding – £ 18,000 – as they would be “more restricted”. This is the clearest indication yet that, despite the introduction of the vaccine, we have anything but a normal UK summer ahead of us, with distance, limited numbers, and possibly even vaccination records putting a damper on activity. I just hope that the money made available today will be enough to get these businesses going again, but I fear that in the long run a “new normal” will mean quieter highways and fewer jobs for young people, with hospitality and retail outlets youth employers are big.


The 95% mortgage guarantee is a depressing addition to existing housing policy, and we could have given a little more thought to the solutions to our housing crisis. It is generally accepted that the Equity Buying Aid Loan Program was a failed policy that drove house prices high and gave home builders free rein to beat poorly built, overpriced homes to desperate young people. But I’m not surprised we’re just getting more of this: if you wait for governments to revise planning policies and put in place effective rent-friendly policies, you’ll be waiting a hell of a long time.


People probably don’t understand how much the tax threshold freezing will affect their pensions and investments in the long run, but that’s kind of the point, isn’t it? Most of these tax freezes concern higher-income pension and investment plans, but make no mistake: if the personal allowance is longer at £ 12,570, it really means that many more people will pay taxes (including lower incomes) when wages are in lockstep rise with inflation. Whether this is the right thing to do as we try to find our way back to pre-Covid economic health remains to be seen.


Why the hell isn’t the Lifetime Isa exit sentence permanently reduced, as there is a good chance that young people will have to fall back on their first home savings when they are laid off in the next year? I wrote about it today for i News: This issue is not going to go away anytime soon, and the Treasury Department missed an easy opportunity to significantly improve a youth-focused product and make the savings landscape far more flexible and relevant for young people today.

After all, retail green bonds sound sexy and progressive, but I’m excited to see how these are structured and sold. I’m definitely all for innovation in the retail savings and investment market, but let’s hope that the risks of these products are carefully managed when millions of people expect ironic, higher returns than on their savings. “

Iona will share the Chancellor’s speech with budget veteran Simon Bain in a special edition of Own It! Podcast that you can listen to tomorrow night. Subscribe to Apple or follow Spotify to catch it as soon as it lands!


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