The UK Government made Emergency Budget changes – do you know how they affect you?

There have been a number of announcements about how the Government is taking emergency action in response to challenging economic times. The Spending Review and Government Budget changes made in 2010 will affect nearly everyone in the UK – it’s important you know how you are impacted and understand what you can do to avoid being caught out.

As a responsible lender our Budget Smart! initiative aims to make sure you find it easier to get the information you need – so you can take action.  Click here for more information on the results of the Spending Review, and see below for more information on the changes to VAT and the SMI (Support for Mortgage Interest) benefit.

You should bookmark this page, as we will continue to update you when different parts of the Emergency Budget come into effect.

VAT increased

On 4 January 2011 the rate of tax paid on goods and services, Value Added Tax, increased. 

What changed?
VAT increased from 17.5% to 20%. VAT is included in the price of goods and services you pay for, so retailers and service providers are likely to increase their prices to cover this change.

When was this change announced?
The Government announced this change as part of the Emergency Budget on 22 June 2010.

Support for Mortgage Interest (SMI) benefit reduced

SMI is an income-related benefit that gives qualifying homeowners help with their mortgage interest payments. The benefit is intended to help towards the interest on the mortgage - it is not meant to cover any of the original amount borrowed, any arrears or any insurance polices.

What changed?
From 1st October 2010 the standard interest rate used to calculate SMI was reduced from 6.08% to 3.63% - equal to the Bank of England’s monthly average mortgage interest rate as published at 31 August 2010.

When was this change announced?
As with other Emergency Budget changes, the Government announced this change on 22 June 2010.

If you receive this benefit – how are you impacted?
The SMI benefit you receive towards your contractual monthly instalment is likely to decrease – meaning you need to increase the amount you pay each month towards your contractual monthly instalment.

How will recipients know about the change?
The Department of Work and Pensions (DWP) wrote to SMI benefit recipients prior to the 1st October 2010 notifying them of the change to their monthly SMI payment.

For more information you should contact your Benefits Office or the DWP.

What you can do
If you are behind on your mortgage payments and worried about having to pay more to meet the contractual payment on your GE Money Mortgage, please call us on 0800 316 1642.  We’re helping other customers like you and can work with you to find a way to make things easier. Click here for more information.

If you are up to date with your GE Money mortgage, but concerned about the additional amount needed to pay to cover the reduction from the DWP, please call us on 0800 316 1625.

You will also find it useful to use this opportunity to review your household budget. Our Budget Planner can be downloaded or completed online.

For more information on the Spending Review and how it affects you, click here. You can also visit Direct Gov for more information about SMI or moneybasics for information about benefits.

For more helpful information on taking control of your finances, click here. 

Don't forget to add this page to your favourites so you can get the information you need about the Government's Emergency Budget changes. 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.