CASH COUNTDOWN
Autumn budget 2024: When Chancellor Rachel Reeves will make her statement plus expert predictions
See the 14 benefit rises set to be announced including Universal Credit
THE Chancellor announced that this year’s Autumn Statement will take place on Wednesday, October 30.
The Autumn Statement provides an update on the government's economic plans, based on forecasts from the Office for Budget Responsibility (OBR).
5
As part of this, the Chancellor updates all the MPs in parliament about the government’s tax and spending plans for the year ahead.
This means that we learn what’s going to happen to things like fuel duty, income tax, and even the cost of a pint.
In August, the Prime Minister today warned of a "painful" Autumn Budget laying the groundwork for tax hikes.
Sir Keir Starmer said: “There is a Budget coming in October and it is going to be painful.
Read more on the budget 2024
"We have no other choice given the situation we are in.”
He added that the country needed to accept "short-term pain for long-term good" but committed to previous promises not to hike National Insurance, income tax and VAT, as well as protecting the State Pension triple lock.
It’s one of the biggest days in the economic calendar and this year, experts are predicting that chancellor Rachel Reeves will announce significant tax changes to try and plug the £22billion black hole in the country’s finances.
Ms Reeves previously warned MPs that her fiscal statement would involve "difficult decisions across spending, welfare and tax".
Most read in Money
Likely candidates for tax raids include changes to Inheritance Tax, Capital Gains Tax (CGT), pensions, and VAT exemptions.
The Treasury has said: “The Chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy and address the £22billion hole in the public finances left by the last government.”
Three million workers to get £1,400 a YEAR pay rise in Budget as Rachel Reeves hikes National Living Wage
Here are the predicted changes to watch out for.
Inheritance tax
It is widely expected that the Chancellor will announce changes to inheritance tax in her statement.
This is the tax that is paid on the value of someone’s estate after they die.
The standard rate for inheritance tax is 40%. However, there is speculation that the government might increase the rate, or the thresholds could be lowered, meaning more people would be subject to the tax.
Additionally, Labour may consider shortening the period before death during which gifts can be made without triggering inheritance tax.
Pensions
Labour previously said it would reintroduce the Lifetime Allowance for pensions, which caps the total amount you can save into your pot tax-free.
This proposal was dropped at the last minute during the election campaign, but Labour may consider other pension tax reforms instead.
Ms Reeves has previously campaigned to reduce the tax relief that higher earners get on their pension, and to instead introduce a flat rate of 33%.
Currently, you get tax relief at your marginal rate of tax, so a flat rate of 33% would mean higher earners would get less relief.
This has led some financial commentators to speculate that this reform could be in scope for the Autumn Statement or future budgets.
5
Another possible target is changing the rules around pensions and inheritance tax.
Currently, pensions are not counted as part of someone’s estate when they die and can therefore be passed on inheritance tax-free. It’s possible that this could be reviewed.
Capital gains tax
You pay CGT when you sell an asset that has appreciated in value, such as stocks, shares, a second home, or valuable artwork.
Currently, the first £3,000 of profits (or £1,500 for trusts) is tax-free.
However, some experts are predicting that this allowance could be scrapped entirely and that the tax could be extended to include other assets.
Business rates
Business rates are levied on properties that aren't first homes, including shops, offices, pubs, warehouses, factories, holiday rental homes, and guest houses.
During the election campaign, Prime Minister Sir Keir Starmer pledged to overhaul the system to support small businesses. These changes could be announced in the Autumn Statement.
One potential reform could involve basing the rates on the value of the land, rather than the current estimated annual rental costs.
Winter fuel payments
Ms Reeves has already confirmed that universal winter fuel payments will be slashed, starting from this year.
5
In the past, winter fuel payments have been made available to everyone above state pension age. But now, the money will only be available for people who receive certain benefits.
Households with someone over the state pension age receiving means-tested benefits including Pension Credit, Universal Credit and income support will still receive the cash.
It will be worth £200 for eligible households, or £300 for eligible households with someone aged over 80.
Fuel duty
The Treasury has refused to rule out a rise in fuel duty, which could prove a shock to household finances.
The levy hasn’t risen since 2011 and was even slashed by 5p in March 2022.
It was The Sun’s Keep It Down campaign that secured a 12-month extension to the temporary fuel duty cut in March last year.
Motor association the AA has warned that for low-paid workers, losing this tax relief could result in an additional £171.60 in annual fuel costs.
Stamp duty
Anyone buying a property or piece of land over a certain price has to pay a lump sum known as the Stamp duty land tax (SDLT).
The tax applies in England and Northern Ireland, with separate property tax schemes running in Scotland and Wales.
Stamp Duty is usually paid on increasing portions of the property price when you buy residential property, like a house or flat.
It only applies to properties over £250,000 and the amount you pay depends on how much you paid for the property, when you bought it, and whether you’re eligible for relief or an exemption.
You don't have to pay any stamp duty on a property valued up to £250,000, which rises to £425,000 for first-time buyers.
The current system is understood to discourage people from moving houses and is part of the reason older people aren't moving out of expensive, larger properties.
In 2022, the Conservatives introduced a further stamp duty cut for first-time buyers.
The cut means that wannabe homeowners buying houses over a certain amount won't have to pay tax on it.
This saw the threshold rise from £300,000 to £425,000, but it was due to end on March 31, 2025.
The Chancellor could change the tax so it's based on annual land value tax instead of on a transaction.
But it's thought this might be a tricky change to get past the party.
The Sun's 14-year campaign to freeze fuel duty
The Sun has backed drivers as part of the Keep It Down campaign with rates of fuel duty not rising since the start of 2011.
Former Chancellor of the Exchequer Jeremy Hunt earlier this year thanked Sun readers for helping him to make the case to freeze fuel duty in his last Budget.
The freeze meant drivers would not have to face a potential £100 rise in motoring costs as a result of a 12p per litre duty hike.
Our decade-long campaign fights on behalf of readers to freeze duty on petrol and diesel to help deal with rising living costs.
Mr Hunt said: "I know how much Sun readers are feeling the pinch right now.
"Whether you drive a van, a hatchback or a people carrier I know how much you need to be on the road.
"Keeping it down means hard-working people will have an extra £100 this year without having to cut down using their vehicle."
Household support fund
The household support fund was set up to help out families on low incomes with essential costs.
For example, you can go to your local council if you’re struggling to afford things like:
- energy and water bills
- food
- essential items
While the support fund was due to close on September 30, but the government has extended it until at least April 2025.
Universal credit
Monthly standard allowance
- For those single and aged under 25, the standard allowance could rise from £311.68 to £316.98
- For those single and aged 25 or over, the standard allowance could rise from £393.45 to £400.14
- For joint claimants both under 25, the standard allowance will could from £489.23 to £497.55
- For joint claimants where one or both are 25 or over, the standard allowance could rise from £617.60 to £628.099
Extra amounts for children
- For those with a first child born before April 6, 2017, the extra amount could go up from £333.33 to £338.99
- For those with a child born on or after April 6, 2017 or second child and subsequent child, the extra amount could go up from £287.92 to £292.81
- For those with a disabled child, the lower rate addition payment could rise from £156.11 to £158.76 and the higher rate from £487.58 to £495.86
Extra amounts for limited capability for work
- For those deemed to have limited capability for work, the extra amount could go up from £156.11 to £158.76
- For those deemed to have limited capability for work or work-related activity, the extra amount could go up from £416.19 to £423.27
Extra amounts for being a carer
Universal Credit claimants can get an additional amount if they are caring for a severely disabled person for at least 35 hours a week.
The amount per month could rise from £198.31 to £201.68
The work allowance rates could also be set to rise in April.
Increased work allowance
- The higher work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work could rise from £673 to £684.44
- The lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work could rise from £404 to £410.87
5
Housing benefit
Single person
- Has reached pension age: Increases from £235.20 to £239.20
Lone parent
- Has reached state pension age: Increases from £235.20 to £239.20
Couple
- One or both have reached pension age: Increases from £352 to £357.98
Other
- Dependent child/young person aged under 20: Increased from £83.24 to £84.66
Personal independence payments (PIP)
Personal independence payments (PIP) rates could rise by 1.7% in April.
PIP covers the extra cost of living for those living with illnesses or disabilities.
Payments for the daily living component could rise from £108.55 to £110.40 for enhanced and from £72.65 to £73.89 for standard.
The mobility component could also rise from £75.75 to £77.04 for enhanced and from £28.70 to £29.19 for standard.
Employment support allowance (ESA)
Employment Support Allowance (ESA) tops up workers' pay if they are on a low income.
What is the Budget?
THE Budget is big news and where you'll often hear announcements about taxes. But what exactly is it?
The Budget is when the Government outlines its plans for the economy including taxation and spending.
The Chancellor of the Exchequer delivers a speech in the House of Commons and announces plans for things like tax hikes, cuts and changes to Universal Credit and the minimum wage.
At the same time, the Office for Budget Responsibility (OBR) publishes an independent analysis of the UK economy.
Usually, the Budget is a once-a-year event and usually takes place in the Autumn, with a smaller update known as the Spring Statement.
But there have been exceptions in recent years when there have been more updates, or the announcements have taken place at different times, for example during the pandemic or when there is a General Election.
On the day of the Budget, usually a Wednesday, the Chancellor is photographed outside No 11 Downing Street with the red box.
She then heads to the House of Commons to deliver her speech, at around 12.30 following Prime Minister's Questions (PMQs).
Changes announced in the Budget are sometimes implemented the same day, while others may not have a set date.
For example, a change to tobacco duty usually happens on the same day, pushing up the price of cigarettes.
Some tax changes are set to come in at the start of a new tax year, which is April 6.
Other changes may need to pass through Parliament before coming into law.
Rates could change in April for those who are single and:
- Under 25-years-old, from £71.70 to £72.92
- Age 25 and older, from £90.50 to £92.04
- Lone parent under 18, from £71.70 to £72.92
- Lone parent 18 or over, from £90.50 to £92.04
Those in a couple could also see their rates increase:
- Both under 18-years-old, from £71.70 to £72.92
- Both under 18 years old with a child, from £108.30 to £110.14
- Both over 18, from £142.25 to £144.67
- Under 25, partner under 18, from £71.70 to £72.92
- Claimant 25 or over, partner under 18, from £90.50 to £92.04
There are also further rates for those with disabilities or caring responsibilities.
Check out the Government's website for more details.
Attendance allowance
Attendance Allowance helps with the extra costs incurred when you have a disability severe enough to require someone to assist in looking after you.
It’s paid at two different — the amount you get depends on the level of care you need.
The higher rate could go up from £108.55 to £110.40 in April, while the lower rate could also rise from £72.65 to £73.89.
Pension credit
Guaranteed pension credit payments could increase from £218.15 a week to £221.86, or £332.95 to £338.61 for couples.
5
It is possible to also get the "Savings Credit" part of pension credit if both of the following apply:
- You reached state pension age before April 6, 2016
- You saved some money for retirement, for example, a personal or workplace pension
This aspect of pension credit could rise from £17.01 a week to £17.30, or for couples, from £19.04 to £19.36.
Disability living allowance (DLA)
The Disability Living Allowance for disabled people is being replaced by Personal Independence Payment (PIP).
Only people under the age of 16 can apply for DLA Older people whose DLA claim hasn't come to an end may see payments go up.
- Highest amount could increase from £108.55 to £110.40
- Middle amount could increase from £72.65 to £73.89
- Lowest amount could increase from £28.70 to £29.19
And for the mobility component:
- Higher amount could increase from £75.75 to £77.04
- Lower amount could increase from £28.70 to £29.19
New-style jobseeker's Allowance
New-style jobseekers Allowance (JSA) supports people who are out of work while they are looking for a job.
For under 25s, contribution-based and income-based payments could rise from £71.70 a week to £72.92, and from £90.50 to £92.04 a week for those who are older.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity works out what you could get.
Entitledto's determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
There are also further rates for couples, people with children, disabilities and caring responsibilities.
Carer's allowance
Carer's allowance can be claimed f you care for someone at least 35 hours a week and they get .
The rate could go up from £81.90 to £83.29 a week.
The threshold at which you become ineligible for carer's allowance - known as the "cliff edge" will also rise from April.
Child benefit
Most UK parents can claim child benefit, but there are still certain eligibility rules.
You can claim if you're responsible for a child under 16, or an adult under 20 in approved education or training.
Child benefit is limited to only one person in the household, but there is no limit to how many children you can claim for.
There are two child benefit rates - one for the eldest child and another for each further child or children.
The current rate for your eldest or only child is £25.60 per week, which could rise to £26.04 in April 2025.
You can also get £16.95 for every additional child and this could rise to £17.24 next Spring.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
- Personal pension or self-invested personal pension (SIPP) - This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
- Workplace pension - The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out.
These so-called defined contribution (DC) pensions are usually chosen by your employer and you won't be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%. - Final salary pension - This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you'll be paid a set amount each year upon retiring. It's often referred to as a gold-plated pension or a defined benefit (DB) pension. But they're not typically offered by employers anymore.
- New state pension - This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you'll need 35 years of National Insurance contributions to get this. You also need at least ten years' worth to qualify for anything at all.
- Basic state pension - If you reach the state pension age on or before April 2016, you'll get the basic state pension. The full amount is £156.20 per week and you'll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what's known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
Maternity, paternity, adoption and shared parental pay
Pay for mums and dads taking time away for kids, including those adopting, has already gone up.
The statutory rates could increase from the start of April from £184.03 to £187.16, for maternity, adoption, paternity and shared parental pay.
Parental bereavement pay also increased by the same amounts.
Maternity allowance
New mums who don't qualify for standard maternity pay could still get a payment adding up to thousands of pounds from Maternity Allowance.
It could also rise from £184.03 a week to £187.16 from April 2024.
Statutory sick pay
You might be able to get statutory sick pay (SSP) if you're off work, and even if you aren't sick yourself.
SSP is currently worth £116.75 per week and it is paid by your employer for up to 28 weeks.
It could increase in April to £118.73.
State pension
The state pension is now expected to rise from £11,502.40 to £11,975 per year - a £473 boost.
That's because of the triple lock system, which sees the state pension rise in line with whatever is highest out of: wages for May to July, 2.5% or September's inflation figures.
Revised statistics earlier this month revealed that growth in employees' average total pay was 4.1% in the three months to July - not 4%.
As September's inflation figure (1.7%) does not outpace this, state pension payments will rise by 4.1% in April 2025.
This means the full rate of the new state pension will go up from £221.20 a week to £230.27.
For the basic part of the old state pension, the rate will increase from £169.50 to £176.45.
Everything you need to know about Universal Credit
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?
What benefits aren't likely to rise next year?
Benefit cap
The benefit cap is the total amount of benefits a household can receive, and it applies to most people aged between 16 and state pension age.
In Greater London, for couples (with or without children) or single people with a child of qualifying age, the cap is £25,323 a year. For single adult households without children, it’s £16,967.
Outside of London, the limits are £22,020 and £14,753, respectively.
Capital limits
Capital limits restrict the amount of savings you can have before you stop getting certain benefits.
This includes things like Universal Credit and Housing Benefit.
The lower limit remains at £6,000, meaning that any savings you have below that will be disregarded for benefits calculations.
The upper limit is usually £16,000 and will not be changing, meaning that if you have any savings over that, you won’t receive any benefits at all.
If you have between £6,000 and £16,000, you'll typically get a reduced amount, according to each benefit's taper rules.
Bereavement support payments
Bereavement support payments give financial support to people following the death of a partner for a set period of time.
The most you can get is a one-off payment of £3,500 and 18 monthly payments of £350 - this is called the "higher rate" and applies to those who had a child and claimed child benefit, or were pregnant.
The lower rate for those without children is a one-off payment of £2,500 and 18 monthly payments of £100.
These rates are unlikely to rise in line with inflation.
High income child benefit charge
While child benefit payments are expected to increase next year, the penalty imposed on high-income earners is unlikely to change.
If you or a partner has an income of over £60,000 then you may be liable to pay the high income child benefit charge.
If this is the case, it means you will have to pay some or all of the child benefit you receive back.
At the moment you are required to pay back 1% of your child benefit for every £200 earned over £60,000.
You're not entitled to any child benefit if you earn over £80,000.
READ MORE SUN STORIES
These thresholds are unlikely to change next April.
What won’t change
Labour confirmed in the election race that it would not make changes to National Insurance, Income Tax, Corporation Tax or VAT - taxes on typical workers - so we are unlikely to see any of these taxes rise.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Facebook group to share your tips and stories
Topics