What does the Autumn Statement 2024 mean for you?

On Wednesday 30th October, Chancellor Rachel Reeves announced a range of measures that will impact many people financially in various aspects of their lives. With a new government and the cost-of-living crisis ongoing, there has been a lot of speculation about the impact the changes may bring. 

In this blog, we will highlight what changes are being planned and how they may impact your personal and household finances. For more details about the various changes visit the government's website.

In addition to these changes, the Government projects that inflation will average 2.5% in 2024, rising to 2.6% in 2025, and gradually drop to 2% by 2029. This is a large change from 11% inflation in October 2022 and indicates the economy is becoming more stable. The drop in inflation is beneficial because prices for goods and services, like food, fuel and household goods, will rise much more slowly and be more affordable.   

Personal Tax 

• No increase to the basic, higher, or additional rates of income tax, National Insurance contributions or VAT. 
• The Government will not extend the freeze in income tax and National Insurance thresholds. From April 2028, personal tax thresholds will be uprated in line with inflation once again.

National Living Wage (NLW) 

The following changes to the minimum wage are taking place from 1st April 2025. 

• NLW for people over 21 will rise by 6.7%, from £11.44 to £12.21 per hour, impacting over three million workers according to the Government.
• NLW will increase by 16.3% for workers aged 18-20, from £8.60 to £10 per hour. This is part of a long-term plan to make the minimum wage the same for everyone regardless of age. 
• NLW will increase for apprentices and Under 18s from £6.40 to £7.55 per hour, a 17.9% rise. 
• This is the first time that the Low Pay Commission, which advises the Government on minimum wage, has been told by the Government to factor cost of living into its recommendation. 
• The minimum wage rate is still lower than the ‘real living wage’, a voluntary employers’ pay scheme based on cost of living. 

Households Support Fund and Discretionary Housing Payments 

The government will provide £1 billion in 2025-26, including Barnett impact, to extend both the Household Support Fund (HSF) in England, and Discretionary Housing Payments (DHPs) in England and Wales.  

The HSF will help households facing the greatest hardship and financial crisis, including supporting them with the cost of essentials such as food, energy, and water. This builds on the previous investment of £500 million, including Barnett impact, to extend the HSF in England to 31 March 2025.  

DHPs are administered by Local Authorities and will continue to support vulnerable and low-income claimants to meet additional housing costs or temporarily cover rent. 

Universal Credit  

Debt reductions 

If you owe money for debts including rent, utility bills, benefit payment advances, or council tax, you can have deductions automatically taken from your monthly Universal Credit payments. 

The Chancellor announced today that under new plans, the cap on these deductions will be lowered from 25% to 15% of your monthly payments from 1st April 2025. This change means it could boost your income by an average of £420 per year if you are currently receiving deductions. 

Accelerated migration 

The move of Employment and Support Allowance (ESA) recipients to Universal Credit will be accelerated, with the government targeting completion of all working-age legacy benefit transitions by 2026. 

Carer’s Allowance 

The Government announced a change to the earnings limit for Carer’s Allowance claimants. 

• From 1st April 2025, unpaid carers will be able to earn over £30 more per week without losing their entitlement to Carer’s Allowance. Earnings limit will increase to £196 a week (currently set at £151 per week).
• The amount of Carer’s Allowance will rise from £81.90 a week to £83.29. 
• The Government has said that it will be the equivalent to 16 hours of work at minimum wage. 
• The change will enable over 60,000 more carers to receive support. 
• While the Chancellor acknowledged issues with Carer’s Allowance being clawed back if carers earn a single penny over the limit, a review is ongoing, and it is currently unclear if this policy will change. 

Pensions 

The Chancellor announced the following changes to pensions. 

• From April 2025, Basic and new State pension will increase by 4.1% in line with earnings growth. This means the new full State Pension will increase from £221.20 a week in the previous year, up to £230.25 per week in 2025-26. This means the average pensioner will receive an increase of up to £470.60 per year. 
• Pension Credit Standard Minimum Guarantee will also increase by 4.1% from April 2025, meaning an annual increase of £465.40 in the single pensioner guarantee and £709.80 in the couple guarantee. The threshold by which you can get Pension Credit is increasing from next April, you get it as a single person on annual earnings below around £11,400 will be below around £11,800. 

Stamp duty 

From 1st April 2025 start paying stamp duty on a property that costs £125,000 or more (currently it’s £250,000 or more). This will mean that a lot more people could be facing stamp duty when purchasing a home. First-time buyers' stamp duty would only be paid on a property that costs £300,000 or more (currently, it’s £425,000 or more).   

Help to Save 

The Help to Save scheme provides low-income earners claiming Universal Credit or Working Tax Credit a savings boost by paying a 50% bonus on the amount saved, up to a maximum of £1,200 over 4 years.  

Currently, only Universal Credit claimants earning £793.17+ per month (or those on Working Tax Credit) can join. From April 2025, any Universal Credit claimant who works, even earning just £1, can join until April 2027. 

Other rises impacting lifestyle choices:  

• Bus fare cap extended: Since January 2023, single far bus journeys in England were capped at £2. From 1st January 2025, this will increase to £3. There are differences in London, Northern Ireland, Scotland, and Wales.   
• Fuel duty: Tax on petrol and diesel will remain at 52.95 pence a litre, due to expire now on 22nd March 2026. 
• Cigarettes: The average cost of 20 cigarettes (packet) will increase by 54 pence from 30th October 2024 at 6 p.m.  
• Vapes: From 1st October 2026, vaping products will be taxed more from 1st October 2026, at a rate of £2.20 per 10ml of liquid.   
• Soft drinks: Increasing in price over the next five years from 1st April 2025.  
• Draught: The price of a pint will be cut by 1.7% from 1st February 2025.  

Changes that could indirectly impact employees and consumers:  

Employer National Insurance rates will increase from 13.8% to 15%, and companies will start paying at £5,000 of employee earnings instead of the current £9,100. Large employers will be hit hardest by these changes since they receive less support than smaller businesses. To manage these extra costs, companies might look to reduce staff pay and benefits or increase their prices to consumers. 

Charlene Marks, Head of Mental Health & Money Advice Service, said in a statement:

Further information can be found here:  

Money Helper: https://www.moneyhelper.org.uk/en/blog/everyday-money/what-the-autumn-statement-means-for-you 

Money Saving Expert: https://www.moneysavingexpert.com/news/2024/10/martin-lewis-autumn-budget-2024/