As the Budget approaches, Chris Brown, Director of Products and Marketing at the Darlington Building Society, has some suggestions for Jeremy Hunt

With 2024 set to be an election year, and parties jostling for position during uncertain economic times, we are building up to what will arguably be the most important Budget for years.

Darlington Building Society’s core purpose has remained the same since 1856: to help people onto the property ladder and support them on their savings journey.

So, as a financial institution embedded in North-East life, we have strong views on what’s needed to enable that to happen.

Despite that economic uncertainty, the Society’s quality of lending remained robust in 2023 and, for the first eleven months of last year, we paid an average rate on our savings products of 3.25%.

That was against an average interest rate in the market of 2.4% – equating to additional interest of more than £5.5m.

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At the same time, we were able to invest in our business, improving our use of technology and online banking, whilst increasing our commitment to our branch network.

So, what do we want to see from Jeremy Hunt’s Spring Budget?

Housing/Mortgage Market View

Whilst we’re starting to see a recovery in the mortgage and housing market, as rates start to fall, conditions remain difficult for first time buyers.

That’s due to a limited supply of new properties, the rising cost of living impacting on saving for a deposit, and the availability of cost-effective mortgage solutions.

The housing market accounts for around 10% of Gross Domestic Product, so it’s critical the Government supports borrowers.

The Government Help to Buy scheme was highly effective in helping first time buyers onto the property ladder, by reducing mortgage costs and increasing the supply of new properties.

Firms have tried to fill that gap with innovative products, but I’d love the Government to bring in a similar initiative to help boost housing supply and improve affordability.

We need the Government to produce a cohesive plan to tackle the country’s chronic housing stock shortage and reduce the supply pressure, either through building more homes or reviving derelict properties.

Savings View

Although the rise in interest rates has not been favourable for mortgage holders, it has led to a renaissance in the savings market.

This has highlighted the need for reforms to protect savers from the unintended consequences of earning more interest and being pushed into paying more tax.

In my view, you should always look at ISAs first wherever possible, and I’d love to see the Government look at increasing the £20,000 ISA allowance, which has remained the same since March 2017.

I’d also like the Government to consider increasing the Personal Savings Allowance, as the current level – £1,000 for standard taxpayers and £500 for higher taxpayers – means more savers are being pushed into paying tax on their savings.

Saving is tough enough, especially in the current climate, so we need to encourage discipline and incentivise as many people as we can.

Finally, I’d like the Government to simplify savings across their Lifetime ISA product, by reducing the penalty for accessing funds, and also raising the LISA and Help to Buy ISA property price thresholds.

What Jeremy Hunt pulls out of the hat on March 6 remains to be seen, but I hope at least some of these measures will be among them.