In the Autumn Statement 2023, the Chancellor Jeremy Hunt announced some key changes he is implementing for the growth of the UK’s economy. One of the most notable changes is the decrease in National Insurance for employees from 12% down to 10%, taking effect from the 6th of January next year. Additionally, the National Living Wage will experience a welcome increase to £11.44. And there’s good news for self-employed individuals too, as Class 2 National Insurance contributions are no longer required whilst Class 4 contributions have been reduced. These measures will financially benefit millions of individuals across the UK and provide a much-needed boost to the economy.
Here are the key highlights that could affect you from the Autumn Statement:
National Wage increases:
The Treasury has announced that the National Living Wage will see a significant increase of over £1 per hour starting from April 2024. Chancellor Jeremy Hunt stated that the pay threshold will rise from £10.42 to £11.44 per hour, marking the largest increase in over a decade. Furthermore, this increase will also apply to 21-year-olds, resulting in an overall annual pay rise of £1,800 for full-time employees. Additionally, the government has declared that the national minimum wage for 18 to 20-year-olds will rise by £1.11 to £8.60 per hour. Moreover, apprentices will experience a boost in their minimum hourly rates, with 18-year-olds witnessing a pay increase of over 20%, elevating their minimum hourly wage from £5.28 to £6.40.
National Insurance changes for the employed and self-employed
The UK’s Autumn Statement 2023 brings several tax changes that have implications for self-employed people, business owners, and entrepreneurs. Firstly, the main rate of National Insurance will be cut from 12% to 10% from 6 January, which will benefit 27 million people. Secondly, starting from April, self-employed individuals earning over £12,570 will no longer have to pay Class 2 National Insurance. Thirdly, Class 4 National Insurance for self-employed people, which is paid on profits between £12,570 and £50,270, will be reduced from 9% to 8% from April onwards. Overall, these changes are expected to provide relief to self-employed individuals and enable them to invest more in their businesses.
With the exception of the previously mentioned changes to income tax & the National Living Wage, the Autumn Statement has outlined various financial and economic changes that will affect millions of people’s budgets and public services.
The statement has revealed several key points, including a 6.7% increase in universal credit and working-age benefits in England and Wales from April, as well as an increase of Local Housing Allowance rates to 30% of local rents.
Furthermore, the Work Capability Assessment will be reformed to better reflect the availability of home working after the Covid pandemic, with a particular focus on funding schemes for people with health conditions and those unemployed for over a year. Claimants in England and Wales who refuse to seek employment will lose access to their benefits and free prescriptions.
The state pension payments will also increase by 8.5% from April, in line with the average earnings. Savers will soon have the right to choose their pension scheme to allow them one pension pot for life after further consultation.
We will continue to update this blog with any further information as it becomes available. For further information on how this might affect you please get in touch with your Sterling Group representative. Call 01925 626200 or email them at email@example.com.