Young people have missed out in the government’s mini-budget as savings from personal tax cuts will disproportionately favour older, higher earners, financial experts have warned.
Personal Finance Analyst at Hargreaves Lansdown, Sarah Coles, said: “The people who missed out in this budget are those on lower earnings and we do know that at the start of their careers, young people earn less, so to that extent young people have missed out because there are far more tax savings here for higher earners.”
The cut to Stamp Duty for first home buyers from £300,000 to £425,000 could be a boon for young people, she said, but it may also have the effect of pushing up house prices and shutting them out of the market. Ms Coles said if the equations were taking student loan repayments into account, that should be regarded as different from tax.
“In the same way you wouldn’t add a mortgage to your tax bill when working out your tax burden, it’s not strictly right to add any other kind of loan repayments.” This comes after the government announced plans to reduce the repayment threshold for student loans to £25,000, for new borrowers starting courses from September 2023, and which will remain in place until 2026-7.“Ultimately, they have done the right thing by working hard to gain a degree in order to accelerate their career, yet they are to be slapped with a huge level of tax as a result.”
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