The Chancellor has announced in the Autumn Statement a series of changes that will affect finances.
Jeremy Hunt started his speech in the House of Commons, stating that in the face of “unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future. He says the plan leads to lower energy bills and a stronger health and education system.
Here is an overview of the key points from the statement.
Tax and wages
- The chancellor said he is accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%. That means, from April 2023, the hourly rate will be £10.42 which represents an annual pay rise worth over £1,600 to a full time worker.
- On personal tax, he will reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140. Those earning £150,000 or more will pay just over £1200 more a year.
- The income tax personal allowance threshold will be frozen until 2028. This means millions of people will end up paying more in tax.
- While the Employers National Insurance Contributions threshold is frozen until April 2028, the Employment Allowance will be retained at its new, higher level of £5,000 until March 2026.
- Tax-free allowances for dividend and capital gains tax also due to be cut next year and in 2024.
- Pensions to rise by 10.1% from April, an increase of £870.
Energy
- From April, the government will continue the Energy Price Guarantee for a further 12 months at a higher level of £3,000 per year for the average household. With prices forecast to remain elevated through next year.
- Households on means-tested benefits will get £900 support payments next year.
- £300 payments to pensioner households, and £150 for individuals on disability benefit.
- Windfall tax on profits of oil and gas firms increased from 25% to 35% and extended until March 2028.
- New “temporary” 45% tax on companies that generate electricity, to apply from January.
- Government will proceed with new nuclear power plant at Sizewell C, which will provide up to 7% of the UK’s total electricity.
- By 2030, government wants to reduce energy consumption from buildings and industry by 15%.
Other important updates
- From April 2025, electric cars will no longer be exempt from Vehicle Excise Duty.
- On education, the chancellor has said he will invest an extra £2.3bn per year in schools.
- 600,000 more people on Universal Credit will be asked to meet with a work coach to increase hours or earnings.
- A £2.8bn funding increase for the social care sector.
- With regards to the NHS, the government will increase the budget for healthcare by £3.3bn. Hunt talks about the devolved administrations, saying that schools and the NHS in Scotland, Wales and Northern Ireland also face pressure and promises an extra £1.5bn funding for the Scottish government, 31.2bn for the Welsh government and £650m for the Northern Ireland executive.
- The government will cap the increase in social rents at a maximum of 7% in 2023-24.
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Source: BBC and Sky News Live