Chancellor Jeremy Hunt’s Autumn Statement contained little or nothing for millions of older people still struggling to cope with the ongoing cost of living crisis.
His mini budget with more than 100 measures appears to give with one hand, while stealthily taking away with the other, heaping further pressure of our oldest and most vulnerable.
His Statement also introduces a potentially punitive scheme to remove benefits from often older and disabled people who have not quite reached retirement age and will still be required to work. Threatening disabled people with loss of benefits if they can’t justify their inability to work is quite horrendous.
Mr Hunt did keep his promise to maintain the Triple Lock, guaranteeing an 8.5% increase in the state pension next April, which we welcome. But he failed to increase the tax thresholds, which means large numbers of older people will soon have to pay income tax for the first time, taking away the much-needed boost in their meagre income, and once again reducing their purchasing power.
Mr Hunt’s headline 2% cut in National Insurance, from 12% to 10% - which will account for the bulk of his spending on budget concessions - is of no use to pensioners who don’t pay it.
At the same time, he offered nothing extra to help our failing public services and struggling health and care sector, even though polls show people – even millionaires - would rather pay higher NI or taxes* and see more investment in them.
In principle the NPC Pensions & Income Working Party would agree with the pension pot being consolidated into one for life. There is a lot of money taken from pension pots when those that have had more than one employer in their working life, want to consolidate their pension into one place. Much will depend on what appears in the legislation.
As usual the devil is the detail, but it is clear he is putting money into businesses rather than into public services. A lot of recent studies have shown we may be living longer but we are in living poorer health, exacerbated by delays and under provision of healthcare. To get people back to work there needs to be investment in health services to support disabled people and those with ill health, stop the ageism in employment. Older people out of work could be affected by this but not be able to get a job due to ageist attitudes.
Overall, there is little to celebrate in this Statement. It is worth noting that the Office of Budget Responsibility has said that UK living standards are forecast to be 3½ per cent lower in 2024-25 than pre-pandemic. This would be the largest reduction in living standards since records began in the 1950s, but only half the fall we expected in March. So perhaps it’s a little premature for the Chancellor to be celebrating a drop in inflation, which is still much higher than before.
*A YouGov survey found that three-quarters of Britons support a wealth tax. Research by Patriotic Millionaires of those with investable assets of £1m found that 68% of the richest people in the country supported the introduction of wealth taxes.
Download the press release
SUMMARY OF AUTUMN STATEMENT, 22nd November 2023
The Chancellor unveiled the contents of his Autumn Statement in the House of Commons today (22nd November). It sets out the government's tax and spending plans for the year ahead, affecting the take-home pay and household budgets of millions of people, as well as setting out how much will be spent on key public services.
Here is a summary of the main measures.
Following the Autumn Statement, the state pension from April 2024 will be as follows:Â
£221.20 a week for the new full state pension, or £11,502 a year.Â
£169.50 a week for the old basic state pension, or £8,814 a year.
Benefits and pensions
State pension payments to increase by 8.5% from 8th April 2024, in line with average earnings. The full basic state pension will increase by £13.30 a week to £169.50. The full new state pension will increase by £17.35 a week to £221.20.
Universal Credit and other working-age benefits to increase by 6.7% from April, in line with September's inflation rate.
Local Housing Allowance rates - which determine the level of housing benefit and Universal Credit people receive for rent - to be unfrozen and increased to 30% of local rents.
Work Capability Assessment to be reformed to reflect availability of home working after Covid pandemic.
Funding of £1.3bn over the next five years to help people with health conditions find jobs.
Further £1.3bn to help people who have been unemployed for over a year.
But… Claimants deemed able to work but refusing to seek employment will lose access to their benefits and extras like free prescriptions. Under plans that will need Parliamentary approval, benefit claimants who fail to find work for more than 18 months will have to undertake work experience placements. If they refuse they will lose access to their benefits for a period.
Taxation and wages
National Insurance cut from 12% to 10% from 6th January, affecting 27 million people
Class 2 National Insurance - paid by self-employed earning more than £12,570 - abolished from April.
Class 4 National Insurance for self-employed - paid on profits between £12,570 and £50,270 - cut from 9% to 8% from April.
National Living Wage - to increase from £10.42 to £11.44 an hour. New rate to apply to 21 and 22-year-old workers for the first time, rather than just those 23 and over.
No increase in the tax on alcohol.
Economy and public finances
The independent Office for Budget Responsibility (OBR) expects the economy to grow by 0.6% this year and 0.7% next year, rising to 1.4% in 2025; then 1.9% in 2026; 2% in 2027 and 1.7% in 2028
It forecasts that headline inflation - the rate prices are rising - will fall to 2.8% by the end of 2024 and to the Bank of England's 2% target rate in 2025
Underlying debt forecast to be 91.6% of GDP next year; 92.7% in 2024-25; 93.2% in 2026-27; before declining to 92.8% in 2028-29
Borrowing forecast to fall from 4.5% of GDP in 2023-24; to 3% in 2024-25; 2.7% in 2025-26; 2.3% in 2026-27; 1.6% in 2027-28 and 1.1% in 2028-29
Business and infrastructure
The "full expensing" tax break which allows companies to deduct spending on new machinery and equipment from profits is being made permanent.
The 75% business rates discount for retail, hospitality and leisure firms extended for another year.
Households living close to new pylons and transmission infrastructure to get up to £1,000 a year off energy bills for a decade.