The bad news hidden in Osborne's budget

From expensive wine to pricey insurance

Updated: 
Budget 2016

A spoonful of sugar makes the medicine go down - and hidden away behind George Osborne's popular new 'sugar tax', lifetime ISA and tax changes are a number of measures that the UK public may find a little harder to stomach.

Either not mentioned at all, or glossed over quickly in the chancellor's budget speech, here are a few things we think you ought to know.

The Lifetime ISA is very risky
From April 2017, those aged between 18 and 40 will be able to take out a Lifetime ISA into which they can put up to £4,000 a year - with the government contributing an extra £1 for every £4 saved up to the age of 50.

The idea is that young people can get more help saving up for a deposit on a home.

However, the fund can only be used to buy a first property, or withdrawn after the age of 60 to fund retirement. If you want to use it for anything else, you'll be hit with a 5% penalty. This makes it extremely risky for anyone that might be strapped for cash in future: no spending the money on a car to get you to work, for instance.

Even worse, if mortgage companies refuse to lend to you - an increasingly common problem - then you won't be able to get your hands on your cash till you're 60.

By specifying that the cash must be spent on property, the government will be propping up the already out-of-control housing market. And, of course, the deal is a great one for anyone who can count on being able to buy one day and who can afford to lock up £4,000 a year indefinitely - or whose parents can.

Wine's going to get more expensive
When you're an Eton alumnus, it's terribly important to show that underneath you're just a man of the people. So while duty has been frozen on beer, cider and spirits, it's to go up in line with inflation on wine.

Oh, and the sugar tax will apply to the mixers in your vodka and tonic or rum and coke - so those will be getting more expensive too.

You'll be paying more tax
Total tax revenues are currently 36.3% - higher than at any point during the last Labour government - and are still going up. By 2019-20, says the Office for Budget Responsibility, the figure's expected to hit 37.5%.

Your insurance premiums will rise
The £700 million promised for flood defences will please many - until they get their next insurance quote. It's to be funded by an increase in the tax you pay on your insurance premiums. And while you might have imagined the increase would apply only to buildings insurance only, it's being added across the board.

Those who already pay high premiums will be hit hardest: along with an earlier increase announced last year, the move could see young drivers paying an extra £50 a year.

Non-doms get a year to shift their assets
It was, clearly, a positive step when Osborne announced last year that he planned to crack down on 'non-doms' - people who, because of some often tenuous connection with another country, are able to avoid UK income and capital gains taxes by being legally domiciled somewhere else.

However, yesterday's budget made this crack-down rather less of a threat, with the revelation that they'll only need to start paying tax on gains made after next April - giving them a clear year to shift their money somewhere else.

The Money Advice Service is set for the chop
Highly valued by those that use it, the Money Advice Service was set up in 2010 as a source of expert, impartial advice on handling personal finances. It doesn't cost the taxpayer a penny, as it's funded by the financial advice industry - but the financial advice industry would rather stop.

The service is now due to be scrapped and replaced with a much smaller service focused on those in the greatest difficulty, and with its pensions advice arm being handed over to someone else.

UK Budget Highs and Lows

Celebrities caught out by a tax bill

Celebrities caught out by a tax bill