From tax cuts to pension reforms, there was a lot to take in from this year’s autumn statement. BETHANY WALES looks at what it means for your money.
TAX CUTS
The headline announcement was that National Insurance would be cut by 2pc, which chancellor Jeremy Hunt said would “put cash in the pockets of 27 million people”.
It is currently charged at 12pc for employees making between £12,571 and £50,271 - plus 2pc on earnings above that.
However, this initial contribution will drop to 10pc from 6 January - three months earlier and a bigger cut than many had been expecting.
The chancellor said this will save £450 for someone on the average UK salary of £35,000.
For NHS nurses, the savings will be around £500 a year, while a typical police officer will save more than £630 a year.
Around two million self-employed people are also set to benefit from National Insurance reforms - although they will have to wait until April for them to take effect.
Mr Hunt abolished the class 2 flat-rate weekly contributions of £3.45 - currently paid if annual earnings are above £12,570 - and reduced class 4 contributions on all earnings between £12,570 and £50,270 from a rate of 9pc to 8pc.
He said the combination of these two measures would save the average self-employed person £350 a year.
PENSION REFORMS
There has also been a welcome boost for pensioners, with the chancellor announcing that state pension would rise by 8.5pc, in line with pay increases.
Mr Hunt ruled out plans to adjust the so-called triple lock, which sees the state pension increase each April in line with whichever is highest out of inflation, the average increase in wages, or 2.5pc.
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This means that someone on the full, new state pension will see their pension grow from just under £204 per week to just over £221 per week from April 2024.
Meanwhile, someone reaching state pension age before 2016 could see their full, weekly, basic state pension increase from around £156 to about £169.
Mr Hunt also said he would consult on giving people one pension pot for life, with savers given a "legal right to require a new employer to pay pension contributions into their existing pension".
He estimated these reforms could help unlock an "extra £1,000 a year in retirement for an average earner saving from 18".
BEER, BENEFITS AND LIVING WAGE
Elsewhere, there was good news for beer drinkers, with duty on beer, cider, wine and spirits frozen until August next year - a year on from the last rise.
He also confirmed that the alcohol duty paid on a pint in a pub would remain lower than in a shop.
Smokers, on the other hand, will pay more, with the duty on hand-rolling tobacco going up by an additional 10pc.
Meanwhile, those on the lowest pay are also set to receive a boost, with the minimum wage and benefits given above-inflation increases.
The National Living Wage will go up from £10.42 to £11.44 per hour in April next year - an increase of 9.8pc.
Mr Hunt said this would be worth up to £1,800 for a full-time worker.
This higher rate will also be paid to 21 and 22-year-olds for the first time
Benefits will be raised by 6.7 pc, after the chancellor backed away from using a lower uprating figure.
However, up to two million disability claimants will face tougher rules on finding work where possible.
Under the new rules, if a claimant has still not found work after 18 months, they’ll need to take part in a compulsory work placement.
If they "choose not to engage with the work search process for six months”, the government will end their benefits.
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