What the Chancellor’s new Autumn Budget means for you
Revealed on Thursday, the Chancellor’s new plan to ‘restore stability’ and ‘build long-term prosperity’ will involve billions of pounds of tax rises and spending cuts.
It comes at a time when many households are already struggling with higher prices and falling real incomes. So what does the Autumn Budget mean for you and your family?
Income tax threshold changes
A freeze on income tax thresholds until 2028 means that millions of people will pay more in tax.
The tax means that income tax thresholds won’t rise with inflation. So if your wages increase, more of that money will go to the taxman.
Additionally, the threshold for the top rate of tax will fall from £150,000 to £125,140. This means top earners will pay even more in tax.
Possible council tax rises
At the moment, most local authorities increase council tax by 2% each year. This is the maximum increase allowed by government.
From April 2023, all councils will be able to increase council tax by 3% each year to cope with gaps in their funding.
If you live in a place where the local authority also provides care services, your council tax may go up by an additional 2% to a total of 5%. Previously, the social care precept could increase by 1% each year.
The National Living Wage for over-23s will increase from £9.50 per hour to £10.42 per hour from next April.
If you are currently paid less than £10.42 per hour and work full-time, you could get a pay rise worth more than £1,600 per year. However, the increase could put additional pressure on employers.
Scaled-down energy bill support
You could see your energy bills go up from April, but the government will still provide some support.
With government help, a typical household energy bill is currently £2,500 per year. From April, this will increase to £3,000. Without government help, average bills could be in excess of £3,700 per year.
Low-income households, pensioners and people on disability benefits will also receive additional support.
Pensions and benefits
If you receive a state pension or benefits like Universal Credit, you could see payments increase by 10.1% in line with inflation.
The Chancellor confirmed this meant the government was sticking to its ‘triple lock’ on the state pension.
However, an £86,000 lifetime cap on social care costs in England - which was due to take effect in October 2023 - has been delayed by two years.
Vehicle tax on electric cars
If you own an electric car you will pay more in tax from April 2025. The Chancellor confirmed that electric vehicles will no longer be exempt from vehicle excise duty from this date.
He said this would make the vehicle tax system “fairer”.