Is there help for homeowners in arrears? And other Budget questions

People are going over the details of Chancellor Rishi Sunak’s Budget, to see what it means for them.

Here are some of your questions.

There was no new help for struggling homeowners in the Budget, so the first thing to do is talk to your lender. They have been offering coronavirus-related mortgage payment holidays, but the deadline to apply is 31 March.

You may qualify for up to six months mortgage payment holiday if your income has been hit because of the pandemic. But bear in mind that you’ll have to make up the payments later.

If you’re receiving income support, income-based jobseeker’s allowance, income-based employment and support allowance, universal credit or pension credit, you may be eligible for government help under Support for Mortgage Interest. Find out how it works and check your eligibility here.

No. The Chancellor committed last year to raise tobacco duty by inflation plus 2% every year until 2024. However, in the Budget there was no mention of an increase, at least for the moment.

The duty was increased twice in 2020, first in Rishi Sunak’s Budget and then in his November Spending Review.

No. Capital gains tax is the a tax on the profit you make when you sell something that’s increased in value.

While there had been expectations that the rate would be increased from its current level of 20%, the chancellor decided against tinkering with it in the Budget.

However, he has frozen the amount of tax-free gains you can make on selling an asset, such as shares.

At present you can make a profit of £12,300 a year when selling assets without having to pay capital gains tax. That level will now remain in place until 2026.

The chancellor announced that the government would guarantee loans for first-time buyers taking out a 95% mortgage. The loan will be available on properties worth up to £600,000.

Before taking any mortgage deal it’s crucial to work out all the costs, including fees, which can be hefty in some cases.

While you’d think that 95% mortgages would become more competitively priced given the government backing, it will depend how many lenders offer them, and how keen they are for your business.

It’s likely that if you have a 10% deposit you are still going to be able to get a lower-cost loan. Even if you found a cheaper 95% mortgage, it may not prove cheaper once you’ve taken account of the fees and looked at the total cost of repayment.

In simple terms, paying interest on 95% rather than 90% of the cost of a home will mean forking out more each month, even if the interest rate on the lower deposit deal was cheaper.

Under current rules once you reach the age of 55, you can cash in some or all of your pension pot. However the minimum pension age is set to increase to 57 in 2028, under government plans announced last year.

There was no update about the minimum age in the Budget but the consultation on increasing it to 57 ends next month. So, the increase could be confirmed soon after that.

Before taking any money out of your pension savings, it’s important to understand your options and bear in mind that the money you’ve been saving during your working life was designed to pay for your retirement years. If you take it early then you may have less income to live on in your later years.

You can get free guidance about your options from the government through its Pension Wise service.

The chancellor left the pensions triple lock untouched in his Budget. This is a guarantee that the state pension will increase by the highest of earnings growth, price inflation or 2.5% a year. However it is an expensive guarantee and the government has considered replacing it.

One suggestion has been to remove the 2.5% minimum. Such a move would be unpopular with voters but the current government’s majority means it could well decide to push through such a money-saving scheme.

However the Office for Budget Responsibility (the official watchdog that checks the chancellor’s figures) has estimated the amount the government has to spend on state pensions will fall by £1.5bn by 2022. This is partly because average earnings haven’t risen as much as expected, since pay increases have been hit by the pandemic.

That should ease the demands for changing the triple lock in the short term.