What the Autumn Statement means for you and your money
- On November 23, 2023
- By GrowthInvest Marketing
In a speech focused at least partially on an upcoming election, Chancellor Jeremy Hunt has outlined his choices and decisions about the nation’s finances.
In turn, that will affect the money and prospects for individuals across the country.
These are some of the key policies affecting your personal finances.
A tax cut, but remember the bigger picture
The chancellor announced a cut in National Insurance (NI) rates.
NI works in a similar way to income tax, deducting a fixed percentage of the money you earn from your wages. What you pay in pounds and pence depends, of course, on what you earn.
Employees under pension age who earn less than £12,570 a year pay no NI, and neither do people over the state pension age, even if they are still working.
For employees on between £12,570 and £50,268, the current NI rate is 12% on earnings and 2% on earnings above that.
This initial contribution will be cut from 12% to 10% from 6 January, which the chancellor says will save £450 for someone on the average salary of £35,000.
Really importantly this only partially offsets the fact that NI and income tax bands – or thresholds – are already frozen until 2028. That means any kind of pay rise could drag you into a higher tax bracket, or will see a greater proportion of your income taxed than would otherwise be expected.
The chancellor also said NI contributions will be reduced for the self-employed. He has abolished the class 2 flat-rate weekly contributions of £3.45 a week, currently paid if earnings for the year are above £12,570, and is reducing class 4 contributions on all earnings between £12,570 and £50,270 from a rate of 9% to 8%.
VAT – a tax added when you buy most goods and services – is unchanged.
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