Our mission here at Beehive is to make savings and personal finance easier for our members to understand as we get that it can be overwhelming sometimes – especially when things can change so quickly. Here’s our update of the budget and fiscal statements that the Chancellor of the Exchequer delivers each year and sometimes, multiple times a year. Keep up to date with the changes that will affect first time buyers, homeowners, and things to do with personal finance from the Government, right here.
Autumn Statement – 17.11.22
The Chancellor of the Exchequer Jeremy Hunt delivered the Government's Autumn Statement outlining the key priorities for the government as "stability, growth and public services." Here are some of the measures introduced.
Cost of living crisis
- Households on means-tested benefits will receive an additional cost of living payment of £900 in 2023-24. Pensioner households will receive an additional payment of £300 and those on disability benefits will receive an additional £150 Disability cost of living payment in 2023-24.
- Energy Price Guarantee extended for a further 12 months from April 2023 at a higher level of £3,000 per year for the average household.
- From April the National Living Wage will rise by 9.7% to £10.42 an hour, this will mean an annual pay rise of around £1,600 to a full time worker.
- It was announced that the stamp duty cuts announced in the mini budget will remain in place but only until 31st March 2025.
- You can read more on the Autumn Statement at Gov.uk.
September Fiscal Statement – 23.09.22
This statement, dubbed the ‘Mini-Budget’ by the press and delivered by new chancellor of the exchequer, Kwasi Kwarteng included some changes that will affect home buyers as Stamp Duty thresholds were changed again.
Cost of living crisis
- An energy price freeze for households, such that the average annual bill rises to £2,500 in October and stays there for two years.
Stamp duty changes
- The Stamp Duty threshold for first-time buyers is now £425,000 instead of £300,000 and the relief has increased from £500,000 to £625,000 – permanently. This means first-time buyers will pay 5% on the portion from £425,001 to £625,000.
- If you’re not a first-time buyer, the threshold was doubled to £250,000 from £125,000 which means that 0% stamp duty is paid on homes costing £250,000 or less.
- The basic rate of income tax was cut from 20p to 19p in April 2023 - a year early than was proposed by Ex-Chancellor Rishi Sunak in the last statement. Sunak also increased National Insurance by 1.25p in the pound in April and this has been reversed from 6th November.
- New tax measures will cost £20 billion this year, rising to £45 billion in 2026/27.
Spring Fiscal Statement - 23.03.22
Read more about the Spring Statement on the Gov.uk website.
Taxes and duties
- A 5p cut to fuel duty was announced - "the biggest cut to all fuel duty rates ever to come into force at 18:00 on the 23rd March 2022, and last until March 2023.
- 0% VAT on energy saving materials, such as solar panels or heat pumps for homeowners for the next five years - a little helping hand if you're looking to make your home more eco-friendly by installing solar panels and the like.
- The government's household support which is the money they supply councils with to support vulnerable households, will be doubled to £1bn from April 2022.
Pay and wages
- The government will raise the threshold for the amount people earn before they pay National Insurance by £3,000 from July 2022. Rishi Sunak stated "from this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance." This would mean a £6bn personal tax cut for 30 million people in the UK and a tax cut for employees worth over £330 a year. This will be "the largest increase in a basic rate threshold ever, and the largest single personal tax cut in a decade."
- Before the end of this Parliament in 2024, the basic rate of income tax will be cut from 20p to 19p in the pound.
Education and training
- Employment training in the private sector will be reviewed as part of the government's new tax plan which will include assessing whether the apprenticeship levy – a tax on the wage bills of major companies introduced in 2017 to pay for skills training - is "doing enough"
Autumn Budget – 27.10.21
Unusually, the autumn budget in 2021 took place on the same day as the Spending Review which looks at longer-term plans for government departments.
Children, education and skills
- There will be £3bn going to "turbo-charge post-16 education" to increase the number of places in skills bootcamps and creating traineeships.
- There's also going to be a separate £560m commitment for up to 500,000 people to receive free personal tutoring or digital training in maths through the Multiply scheme.
- £500m will be spent supporting parents and children in England with a network of family hubs
- £300m will go towards "A Start for Life" offer for families including parenting programmes and help with perinatal mental health.
- Just under £2bn new funding for helping schools and colleges.
- £24bn has been set aside for a "multi-year housing settlement" with £11.5bn of this earmarked for building up to 180,000 new affordable homes.
- Flights around the UK will be subject to a new lower rate of Air Passenger Duty from April 2023 which should help with the cost of living for those that frequently fly around the UK and boost local airports. To tackle the environmental flip side of this, a new 'ultra-long-haul' band of Air Passenger Duty will be added meaning the further you fly, the more you pay.
Pay and wages
- The National Living Wage is going up next April from £8.91 per hour to £9.50 for people aged 23 and over.
- The public sector pay freeze will be lifted.
- The Universal Credit taper rate will be cut from 63% to 55% no later than 1st December. This should benefit nearly two million families.
Taxes and duties
- We already knew before the Budget announcements that national insurance contributions (NICs) will be increasing by 1.25% from April 2022 to provide more support for the NHS and social care. This increase will apply to class 1 (employee) and class 4 NICs (self-employed workers) and will be paid in the same way that it is currently - administered by HMRC. "Downing Street says this means an employed basic rate taxpayer earning the median basic rate taxpayer’s income of £24,100/year in 2022/23 would contribute £180 more a year, while a higher rate taxpayer earning the median higher rate taxpayer’s income of £67,100/year in 2022/23 would pay £715 more a year." - Money Saving Expert
- Use this calculator to work out the increases to your National Insurance.
- Duty paid on alcohol will change and there will now be just six rates. The higher the percentage of alcohol, the higher the rate. This means weaker alcoholic drinks like beer and lower alcohol wine will have their rate reduced and stronger spirits will get more expensive. Sparkling wines will also have the same duty as equivalent strength non-sparkling wine. Good news for Prosecco lovers. Plus, there's a permanent cut to the price of a pint by 3p.
- The planned duty increase on fuel will be cancelled due to petrol and diesel being at the highest cost of all time at the time of writing.