The day after the Budget: the experts have done the maths, and pay is set to stall
Why it hits youYesterday was the headlines. Today is the small print: what's actually in it for you if you sell stuff online, rent, want to buy a first home or are looking for work, and what the experts think it adds up to.
The Budget watchdog expects no real pay growth for two years, and a leading think tank says the help announced is “thinly spread”. But dig into the full document and there's more for young people than the speech let on, from a bigger tax-free allowance for side hustles to £3,000 for firms that hire young people.
The Facts
What everyone agrees on
Before anyone spins it. Every one of these is checkable.
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Side hustles: from 6 April 2027 the Trading Allowance triples from £1,000 to £3,000. You'll be able to earn up to £3,000 a year from things like selling, freelancing or odd jobs without paying income tax on it. HM Treasury, Budget 2026 ↗
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The allowance is per person, not per side hustle: it covers your total income from all of them, counted before any costs. Go over it and you have to register for Self Assessment, and you can then take off either the allowance or your actual costs, not both. GOV.UK ↗
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Employers get a £3,000 Youth Jobs Grant for hiring eligible young unemployed people, the Jobs Guarantee is extended to 22 to 24-year-olds, and small employers in England get £2,000 for each new young apprentice. These were first announced in the spring. HM Treasury, Budget 2026 ↗
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A Young Entrepreneurs Allowance will be piloted in England, helping successful applicants with living costs in the first year of their business. No amount has been given. HM Treasury, Budget 2026 ↗
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The £4.7 billion Your First Home scheme in England offers first-time buyers 20% equity loans, interest-free for five years, with deposits from 2.5%. Household income must be under £110,000 (£140,000 in London). It is due to start in April 2027. HM Treasury, Budget 2026 ↗
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From today, 29 October, Lifetime ISA savers buying a first home worth more than £450,000 pay a 20% withdrawal charge instead of 25%. HMRC says there were no previous announcements or consultation. HMRC ↗
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Local Housing Allowance, which sets how much housing benefit private renters can get, stays frozen into 2027-28. Resolution Foundation ↗
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The OBR expects CPI inflation to peak close to 4% in early 2027, “no growth in real earnings in 2027 and 2028”, and unemployment to peak just above 5% in spring 2027. Office for Budget Responsibility ↗
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The Resolution Foundation expects typical incomes for people below pension age to fall by 3.0% (£1,050) between 2026-27 and 2028-29. Resolution Foundation ↗
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A White Paper on young people and work is due early in 2027, after Alan Milburn's review. HM Treasury, Budget 2026 ↗
Every Side · 1 of 3
The government's case
More help to get young people into work, and to start out
The Treasury says it “refuses to write off” the nearly one million young people not in education, work or training. The Budget confirms a £3,000 grant for employers who hire young unemployed people, extends the Jobs Guarantee to 22 to 24-year-olds, and gives small firms £2,000 for each new young apprentice. It triples the tax-free allowance for side income, pilots an allowance to help young people start a business, and offers first-time buyers 20% equity loans. Some employers back the slower rise in the minimum wage for 18 to 20-year-olds: one HR firm boss called it “a net positive step” that removes “another barrier” to hiring young people.
- HM Treasury
- Anton Roe, MHR (HR and payroll firm)
Side labels are our editorial calls for now. How we'll rate lean
Every Side · 2 of 3
The think tanks and youth groups
“Stability risks turning into stagnation”
The Resolution Foundation says the help is “thinly spread”, with only just over half going to the poorer half of households, and expects typical working-age incomes to fall 3% (£1,050) by 2028-29. It says over a million renting families lose out from the housing benefit freeze. Generation Rent called that freeze “hugely disappointing”. The Learning and Work Institute warned that with a million young people out of work or study, “the clock is ticking”. College leaders said there was “no new investment for further education colleges”, and school leaders said the Chancellor spoke for an hour without once saying the word “education”.
- Resolution Foundation
- Generation Rent
- Stephen Evans, Learning and Work Institute
- David Hughes, Association of Colleges
- Julia Harnden, ASCL
Side labels are our editorial calls for now. How we'll rate lean
Every Side · 3 of 3
The watchdog's numbers
No real pay rise until 2029
The Office for Budget Responsibility, which checks the government's sums, expects inflation to peak near 4% early next year and “no growth in real earnings in 2027 and 2028”. In plain English: pay rises are expected to roughly match price rises, not beat them. It expects unemployment to peak just above 5% in spring 2027, then fall. The 3.9% minimum wage rise next April is close to that inflation peak.
- Office for Budget Responsibility
Side labels are our editorial calls for now. How we'll rate lean
The Blindspot · what the headlines skip
If you rent, the housing benefit freeze matters more than the home-buying help
The Resolution Foundation says over a million private renting families lose out from the freeze, 91% of them in the poorer half of the country. It also estimates three-quarters of renters who could actually use the Your First Home scheme are in the richer half.
Resolution Foundation ↗Resolution Foundation (full report) ↗Generation Rent ↗
The Blindspot · what the headlines skip
A pensioner pays no tax where a young worker on the same money does
A new Pension Tax Allowance from April 2027 means pensioners whose income is no more than the full state pension won't pay income tax. The Resolution Foundation points out that in 2027-28 a part-time worker on the minimum wage earning £12,739 will pay £34 income tax and £10 National Insurance, while a pensioner on the same income pays nothing.
Resolution Foundation (full report) ↗HM Treasury, Budget 2026 ↗
The Blindspot · what the headlines skip
18 to 20-year-olds didn't catch up
The long-term plan is for the youth minimum wage to reach the adult rate. The Resolution Foundation worked out that getting there by 2029 would have meant a 10% rise for 18 to 20-year-olds this time. They got 3.9%, the same as everyone else. One employer called that “a net positive step”, saying employers won’t face “another barrier” to hiring young people.
The Blindspot · what the headlines skip
The £3,000 side-hustle allowance is a bigger deal than it sounds
It's buried deep in the Budget document and barely made the headlines. If you resell clothes, tutor or do odd jobs, the first £3,000 a year will be tax-free from April 2027, three times more than now. But it's £3,000 in total across everything you do, not £3,000 for each hustle, and it counts what you take in, not your profit.
The Blindspot · what the headlines skip
The biggest decisions are still to come
The plan for young people out of work waits for a White Paper next year, and the Resolution Foundation says key decisions on public services spending were also put off until a Spending Review next year.
Your Call
- The government's case: not yet
- The think tanks and youth groups: not yet
- The watchdog's numbers: not yet
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By No Glaze News · published
Next story Making money on the side? The tax-free limit is tripling to £3,000. Here's what you need to know