Autumn Statement: cash boost for millions as benefits and minimum wage increased and taxes cut, plus strict Universal Credit rules
Kelly Rose Bradford
Netmums contributorSee how today's Budget affects YOUR family's finances – after Jeremy Hunt pledged to 'reduce debt, cut taxes and reward work'
Jeremy Hunt has unveiled the Government's Autumn Statement and – as expected – has made vast changes to the welfare system, affecting millions of households.
He opened his Autumn Budget on Wednesday 22 November, in the Commons by saying the Government will 'reduce debt, cut taxes and reward work.'
We’ve rounded up how the budget announcements will affect YOU, your family and your household finances, and when the changes will come into force.
- £350 one-off cash help for low-income families
- Millions to get cash boost in line with inflation next April
- Special payment to be made after DWP error leaves benefit claimants short-changed
- Study reveals screen time does not harm children's brains
- Shoppers warned about putting Black Friday shopping on their credit cards
Autumn statement at a glance
- Universal Credit and other benefits increased by 6.7%, resulting in an average increase of £470 for 5.5 million households, from April 2024
- National living wage increased to £11.44 an hour
- Employee National Insurance to be cut by 2% to 10% for 27 million people from 6 January 2024
- State pension up 8.5% to more than £900 a year from April 2024
- No increase on alcohol duty until August 2024
- Plans for a single pension for life, meaning employers will have to pay pension contributions into employees existing pension pot if they do not want to change
- Jobseekers who have not found a job after 18 months to take part in a mandatory work placement with benefits stopped if they refuse
1 Universal Credit and other benefit increases - £470 increase
Mr Hunt revealed he would do the following to help households with the Cost of Living crisis:
Increase Universal Credit and other benefits from next April by 6.7% in line with September’s inflation figure.
He said: 'This will be an average increase of £470 for 5.5 million households next year'.
When will this happen?
April 2024
2. National Living Wage increase - £1,800 increase
The Chancellor announced the National Living Wage will increase to £11.44 and hour, which could be worth an extra £1,800 a year for a full time worker.
When will this happen?
January 2024.
3. National Insurance cuts - £450 saved
Employee national insurance will be cut by 2% to 10% for 27 million people.
Mr Hunt said: 'That change will help 27 million people.
'It means someone on the average salary of £35,000 will save an average of £450.'
When will this happen?
From 6 January 2024.
4. State Pensions up - £900 increase
The Chancellor said his 4th economic measure to help with the cost of living would be to uprate state pensions by 8.5%.
He claimed this was '1 of the largest-ever cash increases of the state pension.'
He said: 'The triple lock has helped lift 250,000 older people out of poverty since it was instituted in 2011 and been a lifeline for many during a period of high inflation.
'There have been reports that we would uprate it by a lower amount to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for one million pensioners whose only income is from the state.
'So instead, today we honour our commitment to the triple lock in full. From April 2024, we will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year.
'That is one of the largest ever cash increases to the state pension – showing a Conservative government will always back our pensioners.'
When will this happen?
April 2024
5. Housing allowance for private rents unfrozen - £800 of support
Mr Hunt said he had listened to calls for the need to unfreeze local housing allowances.
He said: 'I will therefore increase the local housing allowance rate to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year.'
When will this happen?
Next year
6. Alcohol Duty frozen
Mr Hunt said: 'As well as confirming our Brexit Pubs Guarantee, which means duty on a pint is always lower than in the shops, I have decided to freeze all alcohol duty until August 1st next year. That means no increase in duty on beer, cider, wine or spirits.'
When will this happen?
Until August next year.
The National Living Wage is set to rise to £11.44 from April 2024.
— HM Treasury (@hmtreasury) November 21, 2023
The new rate will also be extended to 21 & 22 year olds for the first time.
This is a pay boost to millions, worth over £1,800 a year for a full time worker. pic.twitter.com/Hr8rP3iSfn
7. A 'Pension Pot for Life'
The Chancellor said pension savers will have the right to have '1 pension pot for life'.
He said: 'I will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can move to having 1 pension pot for life.
'These reforms could help unlock an extra £75 billion of financing for high-growth companies by 2030 and provide an extra £1,000 a year in retirement for an average earner saving from 18.'
8. Class 2 National Insurance contributions scrapped - £192 saved
Mr Hunt announced that Class 2 National Insurance is to be abolished, saving an average self-employed person £192 per year.
He said: 'Class 2 national insurance is a flat rate compulsory charge, currently £3.45 a week, paid by self-employed people earning more than £12,570 which gives state pension entitlement.
'Today, after careful consideration and in recognition of the contribution made by self-employed people to our country, I can announce we are abolishing class 2 national insurance altogether, saving the average self-employed person £192 a year.'
He added that 'Access to entitlements and credits will be maintained in full and those who choose to pay voluntarily will still be able to do so.'
9. Class 4 National Insurance contributions scrapped
Self-Employed class 4 NI contributions will go down to 8% from 9%, the Chancellor said.
This is national insurance paid at 9% on all earnings between £12,570 and £50,270.
When will this happen?
From April 2024
Our plan for growing the economy - today's speech in 60 seconds 👇 pic.twitter.com/aBLOzu3Iis
— Rishi Sunak (@RishiSunak) November 20, 2023
10. Back to Work Plan for unemployed
Chancellor Jeremy Hunt said the Government will 'ask for something in return' when providing a further £1.3 billion of funding to help 300,000 people who have been unemployed for over a year.
'If after 18 months of intensive support jobseekers have not found a job, we will roll out a programme requiring them to take part in a mandatory work placement to increase their skills and improve their employability,' he said.
'And if they choose not to engage with the work search process for six months, we will close their case and stop their benefits.'
Inflation
Mr Hunt stated he will not take risks with inflation, adding: 'The OBR confirm that the measures I take today make inflation lower next year than it would otherwise have been.
'I thank the Independent Bank of England Monetary Policy Committee for their crucial role in bringing down inflation. We will continue to back them to do whatever it takes until the job is done. But as we do, we will continue to support families in difficulty.'
Other spending announced
The Chancellor also said he was 'deeply concerned about the rise of antisemitism in our country' and was announcing 'up to £7 million over the next 3 years for organisations like the Holocaust Educational Trust to tackle antisemitism in schools and universities.'
He said: 'When it comes to antisemitism and all forms of racism, we must never allow the clock to be turned back.'
The Chancellor also announced the Government would continue to meet its Nato commitment to spend 2% of GDP on defence.
Stay up-to-date with DWP and money news
You'll find details of all the benefits and entitlements you may be able to claim on our Cost of Living hub.
There is also info on all the cash you might be entitled to, plus the dates when you can expect the latest Cost of Living payments and other allowances to land in your bank account.
Additionally, there's tips from the Money Saving Expert, Martin Lewis, as well as brilliant ideas for saving money on everything from your weekly shop, to that well-deserved holiday.
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