Autumn Statement 2023: how will this impact you?

The Autumn Statement was announced last week (22nd November 2023) by Chancellor Jeremy Hunt.

The key takeaways were the cut in National Insurance rates, a rise to minimum wage, an increase in benefits, and the slowing of price rises. But what does this mean to you, and how will it affect you? We outline the main elements of the speech below, and what impact this has on you.

National Insurance Cut

The biggest talking point of the speech was a cut in National Insurance rates. Initially, the cut is 2% – which, for someone earning an average salary of £35,000, will be a saving of £450. National Insurance payments for the self-employed have been reduced, too.

6.7% Rise in Benefits

The Chancellor also announced that benefits would be increased by 6.7% – in line with September’s inflation figure. This includes disability benefits and universal credit; saving a family on standard allowances with two children around £900 more per year compared to the previous 12 months. This starts in April.

A slow down in rising prices

We’ve all felt the pain as the cost-of-living pressures have increased dramatically over the last couple of years. Official figures show that food prices are up a staggering 30% compared to two years ago.
The government now anticipate that the inflation rate will drop to 2.8% by the end of 2024, after peaking to over 11% in October 2022.

When judging this speech in terms of the effect on your personal finances, we must consider both sides of the coin.

The National Insurance cut will leave more in workers’ pay packets, but the ongoing freeze in thresholds drags many into paying more tax.
A 6.7% rise in benefits is significant, as is the end of freezing the Local Housing Allowance (helping people pay rising rents), but millions face more stringent tests over entitlement.
And the rate of rising prices is much lower than it has been, but the effect of higher interest rates – particularly through mortgages – is pain yet to come for hundreds of thousands of households.

If you have questions about how the Autumn Statement may impact you and your finances, please contact us.

Attivo (trading name of Attivo Financial Limited) is authorised and regulated by the FCA. Tax planning is not an activity which is regulated by the FCA.