The Chancellor delivered the new Budget today – a plan that brings both a big help for local families but also a hidden tax rise that will affect many working people across Blackpool.

1. The Hidden Cost: Your Wages May Be Taxed More

The biggest takeaway for working people is a measure called “Fiscal Drag” – a kind of ‘stealth tax.’

Here is how it works:

• The Freeze: The amount you can earn before you start paying Income Tax and National Insurance (NI) will be frozen for an extra three years, lasting until April 2031 (Personal Allowance remains at £12,570 and the higher rate at £50,270).
• The Impact in Blackpool: Even if your boss gives you a pay rise to help with the cost of living – say, you get an extra £1,000 a year – more of that rise gets pulled straight into tax because the threshold hasn’t moved. You are earning more on paper, but you could still feel poorer, as more of your money goes to the Government. This will affect thousands of workers here, from the hospitality sector to those in the DWP offices.
• Addition: This extension is projected to raise £7.6 billion nationally, but it could hit middle earners hardest in areas like Blackpool, where average wages are below the national median, potentially dragging more into higher tax bands over time.

2. Help for Families and the Lowest Paid

In a major change that will directly help many of our neighbours, key policies were announced:

• End of the Two-Child Benefit Cap: The limit that stops Universal Credit and Tax Credit payments for a third or subsequent child will be removed from April 2026.
• Relief: This is a move to tackle child poverty, which affects over 40% of children in Blackpool (significantly higher than the UK average). It means larger families will get more vital financial support.
• Addition: Nationally, this lifts around 450,000 children out of poverty, with an average gain of £5,310 per affected household. Additional family supports include expanding free school meals to all pupils with a parent on Universal Credit and increasing Universal Credit childcare caps for families with three or more kids.
• Bigger Rise for the Living Wage: The National Living Wage for over-21s will increase by 4.1% to £12.71 per hour from next April.
• Pay Boost: For someone working full-time at the lowest rate, this means their annual pay goes up by around £900. This will provide a crucial boost to low-income earners on the Fylde Coast (but the frozen tax band could mean you pay more in tax too).
• Addition: Younger workers also get uplifts – £10.85 for 18-20s and £8.00 for 16-17s/apprentices – which could help pay for Blackpool’s youth-heavy hospitality and tourism sectors. Plus, Universal Credit’s Standard Allowance rises over 6% in April 2026. Businesses could argue this will be passed on to the customer at the till.

3. New Charges on Drivers and Big Homes

• Electric Car Charge: A new 3p per mile tax is being introduced for electric vehicle (EV) drivers. If you’ve switched to an EV to save money, you will now face a new cost to replace lost fuel duty.
• Addition: This Electric Vehicle Excise Duty starts April 2028, with plug-in hybrids at 1.5p per mile; average EV drivers might pay £240/year.
• ‘Mansion Tax’: A surcharge is being placed on homes valued over £2 million. This is aimed at making the wealthiest pay more to fund public services.
• Addition: The High Value Council Tax Surcharge starts at £2,500/year for £2m-£2.5m properties, affecting under 1% of UK homes – unlikely to hit many in Blackpool, where average prices are much lower.

4. Additional Local Helps and Watch-Outs

To round out the picture for Blackpool residents:

• Transport Relief: Extension of the £3 bus fare cap to March 2027 (covering local routes) and a one-year freeze on regulated rail fares from March 2026.
• Fuel Duty Freeze: Extended 5p cut until August 2026, saving car-owning households ~£89/year, helpful in car-dependent areas like the Fylde Coast.
• Hospitality/Tourism Notes: Mayors are now allowed to levy local hotel taxes on overnight stays -watch out for this potential local addition, though bingo duty is abolished.
• Pension Boost: State Pension up 4.8% (~£575/year extra), aiding retirees in Blackpool’s aging population.

Blackpool News Summary

This Budget is a balancing act. For families on lower incomes, the rise in the National Living Wage and the end of the Child Benefit Cap will be a lifeline. However, the decision to keep the Income Tax thresholds frozen means that many hardworking people who get modest pay rises will see their total tax bill increase through the ‘stealth tax’, at a time when money is already tight for everyone.

Addition: Overall, it leans toward supporting the vulnerable (e.g., via poverty reductions and wage hikes), but fiscal drag and new EV costs could squeeze mid-earners. Local reactions from Lancashire leaders emphasize growth needs, so keep an eye on how funds trickle down to Blackpool’s regeneration projects and social care sectors.