What the Autumn Statement means for you and your money

Chancellor Jeremy Hunt has made his Autumn Statement, which will affect – to some degree - the personal finances and economic prospects of everyone across the nation. We’ve cherry-picked some of the most notable inclusions from the Autumn Statement and explained what this could mean for you. All information below is collated from the government’s official announcement¹.

National Insurance cut

There have been changes to National Insurance rates, meaning employees will now pay less in National Insurance and there have been significant cuts for self-employed workers. Currently, employees earning between £12,570 and £50,268 pay 12% of their earnings as National Insurance contributions – with 2% paid on money earned above the higher amount. From January 6, this will decrease to 10%, saving £400 for those earning £35,000 per year. Self-employed workers will see their Class 2 contributions (£3.45 per week) abolished completely and a decrease in Class 4 contributions from 9% to 8%.

Minimum wage increase

The minimum wage will increase as of April next year, with those aged 21 and 22 years old in line to receive the biggest rise. The National Living Wage is increasing by more than £1 per hour, from £10.42 to £11.44. Moreover, those aged 21 and 22 will now be eligible to receive the National Living Wage, giving them a £1.26 increase per hour.

Younger workers are also set to see an increase in the minimum wage. Apprentice hourly rates will increase from £5.28 to £6.40, while the National Minimum Wage for under 18s increases from £5.28 to £6.40. Last but not least those aged 18, 19 and 20 will see their National Minimum wage increase from £7.49 to £8.60 per hour.

Benefits to rise 6.7%

Some state government benefit payments are due to increase by 6.7%. The increase is to keep up with inflation and ensure these payments serve their purpose. Some benefit payments automatically increase in line with the rate of inflation, but some do not, such as Universal Credit. However, Parliament has agreed that Universal Credit and other benefits will also increase to help people with the cost of living.

State pension on the up

The state pension will increase – somewhat controversially – by 8.5%. This is because of an existing agreement that states the pension must increase by 2.5%, the rate of inflation or the rate of highest average earnings. The latter including bonuses comes out at 8.5%, which is the figure used in this instance. It will mean those on the old basic state pension will receive £169.50 per week, whereas those on the new state pension will receive £221.20 per week.

Smoking to become more expensive

Duty payable on hard-rolling tobacco will increase by 10%, making it more expensive to smoke. However, there has been no increase in alcohol after last year’s increase was implemented to beer, wine, cider and spirits.

Sources

1.    https://www.gov.uk/government/publications/autumn-statement-2023

All the information in this article is correct as of the date of publishing. The opinions expressed in this publication are those of the authors Euxton Mortgage Market. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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

December 2023