Sajid Javid, the now former Chancellor, has revealed that if he was delivering the Budget in two weeks time, he would cut taxes dramatically.
Javid planned to cut the basic rate of income tax to 18 percent. It is currently 20 percent. He went on to state that the plan was to reduce basic rate taxes to 15 percent from 2025, the time of the next General Election.
A two percent cut to basic income tax would save an average UK earner, (£26,000 gross), about £270 per year, or £23 a month, in taxes. A five percent cut to basic income tax would save an average UK earner, (£26,000 gross), about £675 per year, or £56 a month, in taxes.
In his Budget Javid was also to cut stamp duty and start a widespread rollout of electric vehicle charging stations.
The new chancellor, Rishi Sunak is now preparing his Budget after accepting the team of advisers as a condition for his promotion. The team of advisers offered by Downing Street is the reason Javid quit.
The chances of Sunak's Budget resembling Javid's are slim, but Javid does urge the new Chancellor and PM Johnson to retain his pre-worked figures as they will balance the books by the end of this decade.
One of the things Sunak is being pushed by his advisers is to raise the minimum age at which people can 'withdraw' from their pensions. Pension withdrawal is currently allowed for people from the age of 55 and 75 percent of the money taken out is taxed according to the individual's tax rate. Sunak is being told to increase the minimum age of accessing pension pots to 57 years old.
Pension freedoms, which were introduced in 2015 by George Osborne, allowed the withdrawals and it was an intention of Osborne to raise the age to 57, however by 2028, thereby keeping the age in line with rising state pension retirement ages.
Over £30 billion has been withdrawn through pension freedoms since 2015 and some people are relying on it kicking in at age 55 as a source of income. The government argues that the amount's people withdraw has been steadily falling over recent years and thus the negative effect of pushing the age would not be too drastic.