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28th Nov 2023
Posted 3 November 2021
Last week, Chancellor of the Exchequer Rishi Sunak delivered his Autumn Budget from a packed House of Commons chamber. We've pulled together the key changes for single parents and what impact they will have on you finances.
The main change that will affect single parents is the reduction of the Universal Credit taper rate. This change is going to start from 1st December 2021.
The taper rate reduces your Universal Credit payments as you earn money. Currently, the taper rate is 63%, which means that for every pound you earn, you lose 63p in benefits. The new taper rate will be reduced to 55%, meaning that for every pound you earn, you will lose 55p in benefits.
For those with responsibilities for a child and/or a limited capability to work, there is an amount you can earn before the taper rate kicks in called your work allowance.
Currently, the work allowance is £293 per month if your Universal Credit includes housing support or £515 per month if it doesn’t. From December 2021, the work allowance will increase to £335 per month (inc. housing support) and £557 per month (without housing support).
The National Minimum Wage (NMW) for all ages will rise from April 2022. The National Living Wage (NLW) for workers aged 23 and over will increase from £8.91 to £9.50 per hour.
Minimum wages for other age ranges will increase as follows:
The Budget also removed the freeze on pay rises for public sector workers. So, if you work in the public sector it is now possible to get a pay rise again.
The cost of living is the amount of money someone needs to pay for basics such as food, rent, bills, and taxes. With inflation of over 4% predicted for next year, prices on basic goods are likely to get noticeably higher. This means that even if you get an increase in your benefits payment, it probably won’t cover all of these extra costs.
However, one benefit of the Budget is that fuel duty remains frozen, which should help with petrol prices.
If you are a single parent with one child, working part-time on minimum wage:
If you are a single parent with one child, working full-time on minimum wage:
Source for examples: Joseph Rowntree Foundation
You can call our free helpline to get a full benefit calculation that can tell you what Universal Credit payments you can expect to receive, including if your circumstances change.
You can also use this online tax calculator to get an estimate of how your family income will change as a result of the budget.