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Photo by Kelly Sikkema on Unsplash
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As we approach the UK Autumn Budget, which will be set out on November 22nd 2023, the team at Kalgera thought it would be a good time to take stock and see what was promised in the Spring Budget earlier this year, where we currently are and what we hope to see addressed in the Autumn Budget to support those who are financially vulnerable.
Regulation wise, between the budgets, the FCA’s Consumer Duty has come into effect, enforcing banks, institutions and anyone selling financial products and services to improve its support of those who are financially vulnerable.
Economically, those who make up the financially vulnerable subsect of customers have continued to have a tough time with the Bank of England (BoE) increasing interest rates and the ongoing cost of living crisis.
So what should we expect and what are we hoping to see in November?
Inflation
In an interview with Andrew Marr, Jermey Hunt, Chancellor of the Exchequer, reiterated that the government's priority is to make good on its promise to halve inflation by the end of the year. The pledge was made by the Prime Minister in January when CPI inflation was 10.1%, so it would need to drop to around 5% by December. It currently stands at 6.7%. The government also reiterated this in the past few weeks.
Energy Prices
Although it was welcome news to hear that the government locked in the EPG scheme at £2,500 for a further three months from April 2023, we are now entering the worst months for weather with temperatures expected to drop, plus there is an increased risk of more snowfall events due to drier weather.
We hope to see further support for energy bills over the coming months to support those who are financially vulnerable, although energy bills are apparently expected to be somewhat lower than the previous year.
Childcare
Another very significant cost is for those with children. Outlined in the Spring Budget, from September 2025, all eligible working parents with children aged nine months to four years old will be entitled to up to 30 hours of free weekly childcare for 38 weeks a year, which will be an increase from the 15 hours of week that is currently offered.
This will alleviate the burden of childcare costs for many families, however, there is still just under 24 months to go before that goes into effect.
Work for those who are less abled, and for those over the age of 50
The Government touted ‘returnships’ as the apprenticeship programme to entice over 50s back into work in the Spring Budget. However, reports stated that the government quickly scrapped the idea and nothing has come from it despite firms confirming that those over 50 would make for valuable assets to their businesses.
According to government figures, 280,000 workers in the over-50s category have been declared economically inactive since the start of the pandemic in 2020. This makes the programme an important initiative to re-ignite and properly invest into from the government’s point of view, especially as research shows that over 50s will continue to be hit hard by the cost-of-living crisis and still be feeling the financial impact from the pandemic.
Benefits
Benefits are usually increased every April in-line with the inflation rate from the previous September which would equal to an increase of 7%. However, according to a report by Bloomberg, because inflation is expected to be much lower than that by next spring, he may argue for a lower rise.
The Guardian reports that it's possible the cuts, which have not been denied by the government, could be announced in the Autumn Statement as a cost-saving measure.
Although this would be in-line with the inflation rate, this could still cause those who are at financial risk to not improve on their position. We sincerely hope that it would not decrease the financial standing of those dependent on it. Although benefits would remain in-line with inflation, other costs may remain high which makes it redundant and not beneficial to those who need it the most.
Pensions
There are rumours that changes will be made to the ‘triple lock state pensions' that the Conservatives promised not to tamper with in their last election manifesto. It would be a bold move if they were to do so.
Since 2010, this ‘triple lock’ protection guarantees that pensions will be boosted by either September’s inflation, earnings growth (from the period between May to July) or 2.5% – whichever is highest. In recent weeks, news that the state pension could rise by 8.5% from April 2024 under the 'triple lock' guarantee, means that millions of people could receive a weekly increase of up to £17.35. Certain benefits, including Universal Credit, are also expected to rise from next April by 6.7%.
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All in all, if the rumours turn out to be true, it seems there will be cuts made to save money, and in turn, impact those who are already financially vulnerable.
Really, what we would love to see is more thought put into helping those who are suffering the worst from the current economic environment.
Token amounts to help with energy and the promise to extend childcare in 2025 is of course better than nothing, yet what would preferable is a mix of immediate solutions with a long-term plan and promise attached to support the necessities in life that eat into a person’s budget significantly, especially with the economy as it stands today.
Not only would this help people long-term, but it would put a lot less pressure on government-funded services such as the NHS and potentially even increase the GDP.
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About Kalgera
Kalgera, a London-based RegTech, is the first line of defence for financial institutions who want to actively support its most vulnerable customers. By helping the finance sector identify customer vulnerability through transactional data, Kalgera creates better outcomes for the customer and the financial institution itself.
We are committed to working with banks through several avenues to comply with the FCA's Consumer Duty Act. Kalgera’s state-of-the-art technology uses 11 parallel AI models to pinpoint vulnerability to financial abuse and low financial resilience with greater precision.
You can find our online training, in association with the London Institute of Banking and Finance (LIBF), here and more information over at our website.
About Kalgera
Kalgera, a London-based RegTech, is the first line of defence for financial institutions who want to actively support its most vulnerable customers. By helping the finance sector identify customer vulnerability through transactional data, Kalgera creates better outcomes for the customer and the financial institution itself.
We are committed to working with banks through several avenues to comply with the FCA's Consumer Duty Act. Kalgera’s state-of-the-art technology uses 11 parallel AI models to pinpoint vulnerability to financial abuse and low financial resilience with greater precision.
You can find our online training, in association with the London Institute of Banking and Finance (LIBF), here and more information over at our website.
