Since the pandemic, Britain's budget deficit has hit a peacetime high. This is a record reaching 4% of the gross domestic product in a year, due to COVID-related spending.

This has prompted the biggest programme of tax rises since the 1970s to help narrow the gap.

So, what happens next?

The Budget Statement

On Oct. 27, Chancellor of the Exchequer, Rishi Sunak, will deliver a half-yearly budget statement and a three-year spending plan.

This will focus on cost savings, according to the finance ministry.

Budget Cuts

Government departments are aiming to identify cuts of at least 5% from day-to-day budgets in order to free up funds for reinvestment in priority areas.

In March, Sunak announced future rises in corporation tax and a freeze to income tax exemptions.

Taken with the recent increases to national insurance, these amount to the biggest tax rises since at least the mid-1970s, according to the Resolution Foundation think tank.

Tax Increase

Prime Minister Boris Johnson recently announced a 12 billion-pound annual tax increase. He justified this citing long-standing difficulties in the funding of social care and health services.

Resolution Foundation think tank chief executive Torsten Bell said, "Boris Johnson has thrown low-tax conservatism out of the window, raising taxes on the working-age population to fund a big increase in NHS spending, and protect the assets of richer households from the costs of social care."

Universal Credit Uplift

A £20 a week increase to Universal Credit was first introduced in April 2020 to help support those who are currently out of work.

Like the furlough scheme, this increase has now been extended by a further six months, meaning those who claim Universal Credit will be eligible for the increased amount until the end of September.

Who is Paying More Tax?

From April 2022, the rate of National Insurance contributions you pay will change for one year. The amount you contribute will increase by 1.25%, which will be spent on the NHS and social care across the UK.