Articles Entertainment & News5 of the biggest ways the autumn budget will affect your life
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5 of the biggest ways the autumn budget will affect your life

By The Press Association Nov 22, 2023

Finance experts share the most important things you need to know following the announcement of the autumn statement

Jeremy Hunt, the UK’s Chancellor of the Exchequer, presented the autumn statement this afternoon.

He read about 110 different growth measures to Parliament, as he seeks to revive the UK’s economy, focusing on a number of key consumer and personal finance changes.

The full document intends to highlight the potential impact that changes to tax, welfare and public service spending policy will have on households, so here are five of the biggest ways finance experts believe the budget will affect your life…

National insurance

The Chancellor said that national insurance for regular employees will be reduced.

“At the moment, they pay a rate of 12% but now it’ll be reduced to 10%. This is quite significant because it will save a typical employee – someone earning the average £35,404 – £450 a year,” said Myron Jobson, senior personal finance analyst at Interactive Investor.

Jeremy Hunt

“Also, a couple of years ago, after Covid-19, the rate of national insurance did increase as the Government were trying to replenish the economy, after spending quite a bit of money on the crisis, so this is positive news.”

According to the autumn statement, a senior nurse with five years of experience on £42,618 will receive an annual gain of £600, and an average teacher on £44,300 will receive an annual gain of over £630.

“For self-employed people, he will be cutting national insurance by 1p, from 9% to 8% from April 2024, for around two million people. He also abolished the Class 2 national insurance, which refers to the different rates entrepreneurs pay. It all depends on what type of business you are running,” Jobson added.

ISAs

Family saving money using a piggy bank

Over the past few years, there have been calls to simplify the ISA regime, and today the Chancellor announced that the Government will be doing just that.

“There are four main ISAs – cash ISAs, investment ISAs, innovative finance ISAs and lifetime ISAs – that people can choose to open,” said Jobson. “But before, you could only contribute to one per tax year. In this new system, the Government have announced that people are now able to apply for multiple ISAs and use multiple ones at the same time from April 2024.

“The big deal here is that people were always falling foul of these rules because they didn’t realise they weren’t allowed. It clears up the clouds of uncertainly and it encourages people to take advantage of accounts that they think seem great.

“For example, you may want to open another stocks and shares ISA from another provider with a different offering, it now gives people a choice to think more about how and where they invest their money.”

National living wage

Alice Haine, personal finance analyst at Bestinvest, a investment and coaching platform, believes that the increase in the national living wage is very beneficial for workers.

“They are going to increase this by 9.8% to £11.44 and have also lowered the threshold from 23 to 21, so more young people can access wages at a higher rate,” said Haine.

It gives workers a boost too, as we are still emerging from the cost-of-living crisis.

“So if you are giving people more money and income it’ll help them budget finances better to pay their bills and free them up with a bit of cash. And if they are prudent, they can save – or save more – and then build a rainy day pot, which can really help them manage their finances more effectively.”

The UK economy is expected to also swerve a recession. “This is great because recessions mean companies spend less and invest less, therefore more jobs are at risk.”

Sanitary products

Women should be able to buy period products that support and protect them.

In the autumn statement, it was announced that the 0% rate of VAT will be expanded to period underwear.

Kerry Cusack, the executive director at Modibodi, a global period underwear brand, said: “Modibodi was the first period underwear brand to campaign for the removal of VAT back in 2021, when other menstrual products such as pads and tampons had it removed, so we’re absolutely thrilled that the collective voice of the industry and women and girls who menstruate has been heard, and the government has decided to remove VAT from period underwear in the autumn statement.

“This is monumental for the menstruation industry, and a real victory for people who menstruate. Too long have period pants been taxed the same as luxury items such as jewellery and Champagne, when period products are essential for those who menstruate.

“Alongside our industry colleagues, we have fought and campaigned for taking VAT off period pants to give more people choice. Choice to manage their periods in a way that works for them, and the option to choose a more eco-friendly way to manage their periods at a lower budget.”

State pension

State pension will rise from 8.5%, which means the Government is upholding and maintaining the state pension triple lock.

“The Government promised that they will increase the state pension by whatever is the highest of one of these three measures – average earnings, CPI inflation or 2.5% – and the average earnings was the highest. Therefore, state pension will go up by 8.5% this year,” said Haine.

“Pensioners will now get quite a hefty uplift, and now that a consultation has been opened on the possibility of employees having a one-pot pension, this could allow workers to tell their bosses about where they would like their contributions to be invested,” Jobson adds.

“It will help people to engage with their pensions as early as possible and maximise how much they can save.”

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