Young Brits are feeling the pinch as soaring prices continue to rise, and the new UK budget may not provide much relief.

Financial analysts and advisors have stated that the U.K. government's latest budget announcement provided little hope for young people facing soaring living costs.

The Russia-Ukraine war is increasing the cost of living in Britain, as acknowledged by U.K. Finance Minister Rishi Sunak in his Spring Statement. This is due to supply chain issues caused by the Covid-19 pandemic, which have already led to rising prices.

Earlier in the week, it was revealed that U.K. inflation had increased by 6.2% in February, and it is predicted that prices will continue to rise. Sunak referenced an Office for Budget Responsibility forecast indicating that the average inflation rate for this year will be 7.4%.

An immediate cut of 5 pence (6 cents) per liter to fuel taxes was announced by Sunak to combat rising prices, effective from 6 p.m. on Wednesday, for a duration of 12 months.

Interactive Investor's senior personal finance analyst, Myron Jobson, stated that the reduction in fuel duty would decrease the cost of filling up an average family car by £2.75. However, he noted that this was a small amount compared to the recent increases in fuel costs and would not significantly offset them.

According to Jobson, Sunak's decision to reduce the 5% VAT on energy-efficient equipment for households did not ease the "crushing" cost of living pressures faced by the U.K.'s most vulnerable individuals.

He stated that the policy disregards the struggles of the nearly 40% of U.K. households residing in rented homes and facing the full impact of rising energy costs.

The energy regulator in the U.K. is planning to increase its price cap by more than 50% in April, resulting in a drastic rise in energy bills.

Prior to Wednesday's statement, some measures had already been announced to address rising living costs.

Eligible U.K. households will receive a £200 discount on energy bills from October, but the government will recover this money in £40 installments over five years, beginning in 2023.

National Insurance hike

In his statement on Wednesday, Sunak announced that the earnings threshold for National Insurance would increase by £3,000 to £12,570 from 2022. National Insurance is a U.K. tax levied on income to fund state expenses, including the National Health Service.

Sunak also decided to temporarily increase the National Insurance rate by 1.25% from April 2022 for one year.

According to Shaun Moore, a tax and financial planning expert at U.K. wealth management firm Quilter, individuals earning below £34,300 a year will experience a lower National Insurance bill in 2022/23 compared to the current tax year, while those earning more than that amount will see their tax increase.

By 2024, the basic rate of income tax will be reduced by 1 pence for every pound.

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, stated that although the current situation provides some hope, "there's a lot of tunnel to go through before we reach the end."

‘Little reprieve’ for students

Sunak did not address criticism of the Kickstart Youth Employment plan, as Jobson pointed out.

The early delivery of the £1.9 billion plan was deemed "chaotic" by the Public Accounts Committee, which also stated that it had not supported as many young people as initially predicted.

According to Jobson, many young people struggle to find a job with career advancement opportunities two years after the pandemic.

Prospective students will not find much relief in the Spring Statement, according to him.

The U.K. government announced college student financing reforms in February, including lowering the threshold for state-funded loan repayment to £25,000 a year from the current £27,295.

A future graduate earning more than £25,000 would pay £260.55 a year more than a graduate on the previous repayment plan, according to Rosie Hooper, chartered financial planner at Quilter.

The government declared that it intends to lengthen the repayment period to 40 years from the current 30 years. Hooper stated that this would result in many graduates paying a 9% tax for their entire professional life.