The Isle of Man government has announced its budget for the fiscal year 2025-26, detailing a comprehensive plan to allocate £1.46 billion in government spending. This budget seeks to address various socio-economic challenges while ensuring sustainable growth on the island. A notable feature of the budget is a rise in the child benefit threshold by £10,000, setting the maximum earnings at £90,000, alongside a 2.2% inflationary increase in payments.
In line with the UK's "triple lock" principle, the state pensions on the island will see a 4.1% increase, providing much-needed relief to pensioners. The Treasury has also proposed a staggered reduction in income tax rates, which were increased last year from 20% to 22%. Higher earners will benefit from a reduction to 21%, while personal allowances will rise by £250 to £14,750—the first increase in three years.
Maternity and paternity allowances will see a 3.5% increase, and the contribution to nursing care will rise by 5.3%. Additionally, the Winter Bonus will receive a boost of £50, bringing it to £400.
"Treasury will continue to work with the Department and Manx Care to drive not just value for money, but the improved patient safety and delivery of services we expect and our people deserve." – Alex Allinson
Income support is set to increase by 2.2%, alongside most other benefits, as part of the government's commitment to bolster social welfare. The National Insurance threshold rise will result in reduced contributions for lower-income individuals, providing further financial relief.
A key component of the budget is the provision of £357 million to Manx Care to ensure the effective delivery of healthcare services. An additional £14 million contingency fund is allocated for unforeseen health spending needs, underscoring the government's focus on healthcare enhancement.
"This budget tries to address the significant challenges we all face, but also holds out the ability to seize the opportunities that are out there to create a fairer, more vibrant and sustainable island." – Alex Allinson
The budget plan also taps into reserves amounting to £110.6 million, which is projected to decrease to £49.7 million by 2029-2030. This strategic use of reserves aims to provide financial stability while supporting necessary expenditures.
"plan to put money back in people's pockets, to increase consumer confidence, to give business certainty and stability, and to enable continuing economic growth that can be enjoyed by all those who call the Isle of Man their home." – Alex Allinson
However, there are concerns about potential financial strain due to extensive commitments in various sectors. The focus remains on striking a balance between immediate needs and long-term financial health.
"continue to write a blank cheque that starves other essential services of investment and increasingly threatens the overall future finances" of the island. – Alex Allinson
