Chancellor Jeremy Hunt delivered an Autumn Statement aimed at growth for the British economy.
He stated that while the economy has grown, the work is not done.
We take a look at the main announcements that will impact individuals.
- Class 1 primary National Insurance paid by employees and currently charged at 12% is being cut by 2% to 10% from 6 January 2024. For an average worker earning an annual salary of £35,400 they will be just over £450 better off.
- National Insurance is to be cut for the self-employed. Class 2 National Insurance contributions are being abolished from 6 April 2024, saving £192 per year for the self-employed.
There will also be a 1% cut to Class 4 National insurance payments to 8% from 6 April 2024, therefore saving the average self-employed person on £28,200 a year £350 in 2024/25.
Savings and investments
- Savers and investors will see more flexibility within ISA rules from April 2024. Under current rules you can open multiple accounts in a tax year but they need to be different types of ISAs.
- The new measures allow savers and investors to have multiple subscriptions to ISAs of the same type each tax year from 2024/25 onwards.
- ISA holders will also be able to partially transfer ISA funds in-year between providers from April 2024. Currently you have to move all or nothing.
- ISA investors will be allowed to hold certain fractional shares contracts in their ISA.
Investors using an Innovative Finance ISA will be able to invest in open-ended property funds and Long-Term Asset Funds from April 2024. The Chancellor announced he will align the age at which you can apply for an adult cash or stocks and shares ISA to 18. Currently you can apply for an adult cash ISA from age 16. Under 18s can still benefit from a Junior ISAs with a £9,000 annual limit.
The Mortgage Guarantee Scheme for first-time buyers is to be extended. While the scheme – which supports the availability of 95% Loan-to-Value mortgage products - was due to close to new accounts on 31 December 2023, the Government will extend it until the end of June 2025 to continue helping would-be borrowers with smaller deposits buy a home.
- The Chancellor confirmed that the State pension will rise in April 2024 by 8.5%.
This means that the full state pension will increase from £203.85 per week to £221.20 per week (£11,502.40 per year). The maximum basic state pension for those who reached state pension age before April 2016 is currently £156.20 a week and will rise to £169.50 a week (£8,814 per year).
- A new consultation was launched to give savers a legal right to require a new employer to pay pension contributions into an existing scheme so workers have just one pension pot.
Clare Francis, Director of Savings & Investments at Barclays Smart Investor said: “Staying on top of changes announced in the Autumn Statement is important if you want to stay in control of your money.
“Now is the perfect time to remind yourself of the tax breaks available and make sure you and your family are maximising those that are appropriate, using ISAs and pensions and savings accounts.
“ISAs provide a great bedrock for getting people’s savings and investments working harder because returns are not taxed. The announcements in the Autumn Statement simplify ISAs, providing greater flexibility. People won’t need to be as worried about falling foul of the rules and will hopefully become more confident about using their annual ISA allowance to build up their savings and investments.”